Bloomberg News

Tesla Sells $600 Million in Convertibles to Help Repay U.S. Loan

May 17, 2013

Electric-car maker Tesla Motors Inc. (TSLA:US) sold $600 million of convertible notes to help repay a U.S. loan, tapping the bond market for the first time.

The carmaker run by billionaire Elon Musk issued 1.5 percent securities that can be swapped for shares at $124.52 each by June 2018, according to data compiled by Bloomberg. The stock traded at $92.51 at 10:21 a.m. in New York after almost tripling (TSLA:US) in price this year.

About $452.4 million of the net proceeds from the convertible sale and a simultaneous stock offering will be used to repay the company’s Energy Department loan, according to a regulatory filing from Tesla today. The Palo Alto, California-based company plans to sell as many as 3.9 million shares for $92.24 apiece, and Musk is due to purchase 1.08 million shares for about $100 million, the filing shows.

The convertible offering was raised from an initial $450 million, filings show.

Loans for Tesla, Ford Motor Co., Nissan Motor Co. and Fisker Automotive Inc. were awarded in 2009 under a program implemented by President Barack Obama. The carmaker arranged in March to repay its Advanced Technology Vehicles Manufacturing loan in five years, rather than the original 10-year period.

Tesla’s funding plan comes after the company last week reported its first quarterly profit (TSLA:US).

Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. managed the offering, the filing shows.

To contact the reporter on this story: Victoria Stilwell in New York at vstilwell1@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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    • $227.82 USD
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