Tesla announces .5 bln bonds issue to fund Model 3

Updated 2017-08-08 10:35:42 Xinhua

Tesla announced on Monday that it intends to raise about 1.5 billion U.S. dollars in a bond offering, as the U.S. luxury electric automaker seeks to fund the production of its new Model 3 sedan.

Shares of Tesla have risen 67 percent this year and ticked down 0.49 percent to close at 355.17 dollars on Monday after the announcement.

The debt offering marks Tesla's debut in the junk bond market.

Moody's is rating the bond B3 with a stable outlook and Standard & Poor's assigned a "B-" rating for the bond issue.

Tesla said in a press release that it intends to use the net proceeds from this offering to further strengthen its balance sheet during this period of rapid scaling with the launch of Model 3, and for general corporate purposes.

While Tesla has received more than 1,800 reservations per day for the Model 3 since its launch in late July, Tesla CEO Elon Musk confirmed that he's working on "something special" for early reservation holders.

Tesla Model 3 is a major step for the California-based company, and priced around 35,000 U.S. dollars each. It "achieves 215 miles (346 kilometers) of range per charge" and is "designed to attain the highest safety ratings in every category."

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