Tesla’s Priced-for-Perfection Bonds Fall Within Week of Sale
- Company’s new debt issue traded below par almost immediately
- Notes due in 2025 had sold at record low yield last Friday
Tesla rolled out its new Model 3, the more affordable sedan with over 500,000 customers eagerly awaiting the chance to buy. Bloomberg's Tom Randall checked out some of the electric car's features, and explains why Tesla and its CEO Elon Musk face an uphill climb in meeting the Model 3's intense demand. (video by Henry Baker), (Source: Bloomberg)
Tesla Inc. bonds slid a week after they were sold, as excitement over Elon Musk’s ambitious rollout of the Model 3 was tempered amid geopolitical tensions and second thoughts among investors about how little they’re getting paid.
The company’s $1.8 billion of 5.3 percent notes due 2025 slipped below par almost immediately, trading as low as 97.4 cents on the dollar on Friday, according to data compiled by Bloomberg. The eight-year securities had priced a week ago at a record-low yield for a bond of its rating and maturity -- a touch higher than initial talk of 5.25 percent -- and Tesla had added $300 million to the offering to meet demand.