Morning Commentary: Tesla convertibles trade actively, better on reports company to raise new debt

By Stephanie N. Rotondo

Seattle, Aug. 7 – Tesla Inc.’s convertibles were popping in early Monday trading, as it was reported the company intended to raise $1.5 billion via the issuance of new debt.

The company’s 1.25% convertible notes due 2021 were seen in a 117 to 118 context at mid-morning, which compared to a 113.5 to 114 range at Friday’s close, according to a market source.

The 2.375% convertible notes due 2022 were meantime pegged at 127 to 128 versus previous levels around 123.

While the convertibles were moving upward, the underlying stock (Nasdaq: TSLA) was slightly lower in early dealings.

As Palo Alto, Calif.-based Tesla looks to increase its production rate to 500,000 cars per year, the market has been expecting that the cash-burning company will need to raise more capital. It was unclear how that might occur, though at the company’s recent quarterly conference call, Elon Musk, chief executive officer, said an equity raise was not in the offing.

Then, on Monday, Tesla announced its plan to sell $1.5 billion of senior notes due 2025.

Goldman Sachs & Co., Morgan Stanley & Co. LLC, Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and RBC Capital Markets LLC are reportedly running the debt deal.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.