S&P rates Tesla notes B-

S&P said it affirmed its B- long-term corporate credit rating on Tesla Inc. The outlook is negative.

At the same time, S&P assigned its B- issue-level ratings to its proposed $1.5 billion of senior unsecured notes due in 2025. The 3 recovery rating indicates an expectation of meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default.

S&P also affirmed its B- issue-level ratings on its existing senior unsecured debt and revised the recovery ratings to 3 (50%-70%; rounded estimate: 60%) from 4.

“The affirmation reflects Tesla's improved liquidity cushion, which in our view somewhat offsets the substantial risk related to the rapid scale-up of its Model 3 production and the significantly high debt burden on its balance sheet,” S&P said in a news release.

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