, Columnist
The Tesla-SolarCity Convertible Collision
Using a bondholder lifeline will help unravel it.
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There was a time when SolarCity's convertibles were like shiny Mustangs cruising with the top down. These days, they're more like a Camry with a broken tail-light. Still, they've had a little more vroom recently, courtesy of an altogether different vehicle.
Tesla's bid for SolarCity is a lifeline to a company that, as SolarCity's latest results showed, faces a trifecta of high costs, ballooning debt and faltering growth. Yet the all-stock nature of the deal means SolarCity's convertibles will, assuming the deal goes through, be hitched to Tesla's shares -- which brings complications of its own.