Bond investors give Tesla a $1.8 billion endorsement

Bond investors give Tesla a $1.8 billion endorsement

(Reuters) — Bond investors on Friday gave a $1.8 billion boost to Tesla Inc’s balance sheet by snapping up the electric car maker’s first foray into the U.S. junk bond market, where yield-hungry investors have raced to lock in relatively higher returns. Those robust returns, however, have shrunk as a strong reservoir of cash ready to deploy in the riskiest areas of the high-yield fixed income market has pushed them to near their lowest levels in three years. That has given junk-rated issuers such as Elon Musk’s U.S. car company the opportunity to raise cash cheaply. Tesla sold $1.8 billion of eight-year unsecured bonds at a yield of 5.30 percent, the Palo Alto, California-based company said in a filing with the Securities and Exchange Commission. The bond was sold at par, according to a source familiar with the transaction, who requested anonymity because the detail was not publicly disclosed. Tesla initially wanted to sell $1.5 billion worth of debt but e [...]

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