Tesla to issue junk bonds trying to raise $1.5 billion for Model 3
Main page News, Tesla
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8 August
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Tesla Inc (NASDAQ: TSLA.NASDAQ) announced on Monday the decision to raise $1.5 billion in order to fund the production of its new Model 3 sedan, Reuters reports.

For that reason the U.S. luxury electric car maker is going to launch its first-ever emission of junk bonds - lower-quality investments that offer higher yields.

Elon Musk, Tesla’s CEO, believes that bond investors will demonstrate very strong interest for this offering on expectations of great success of Model 3.

"Bond investors, who typically don't love companies that don't make money, will be far more forgiving when it comes to Tesla," agrees bond expert Robbie Goffin, managing director of FTI Consulting.

This year Tesla shares are already up 67 percent, bringing the market value of the company up to approximately $60 billion, which puts it on top of any other U.S. car manufacturer.

And company’s shares continue to be in great demand. More than two dozens of actively managed mutual funds and exchange-traded funds keep more than 5 percent of their portfolios in the company.

The largest individual stake in Tesla belongs to the $2.1-billion Baron Partners fund. And $185-million Baron Focused Growth fund occupies the second-largest position with 17.3 percent of assets in the company.

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