Tesla Sells $600 Million in Convertibles to Help Repay U.S. Loan
Electric-car maker Tesla Motors Inc. (TSLA) sold $600 million of convertible notes to help repay a U.S. loan, tapping the bond market for the first time.
The carmaker run by billionaire Elon Musk issued 1.5 percent securities that can be swapped for shares at $124.52 each by June 2018, according to data compiled by Bloomberg. The stock traded at $92.51 at 10:21 a.m. in New York after almost tripling in price this year.
About $452.4 million of the net proceeds from the convertible sale and a simultaneous stock offering will be used to repay the company’s Energy Department loan, according to a regulatory filing from Tesla today. The Palo Alto, California-based company plans to sell as many as 3.9 million shares for $92.24 apiece, and Musk is due to purchase 1.08 million shares for about $100 million, the filing shows.
The convertible offering was raised from an initial $450 million, filings show.
Loans for Tesla, Ford Motor Co., Nissan Motor Co. and Fisker Automotive Inc. were awarded in 2009 under a program implemented by President Barack Obama. The carmaker arranged in March to repay its Advanced Technology Vehicles Manufacturing loan in five years, rather than the original 10-year period.
Tesla’s funding plan comes after the company last week reported its first quarterly profit.
Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. managed the offering, the filing shows.
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