Tesla needs funding to boost Model 3 production

Tesla seeks $1.5 billion junk bond issue

Tesla Inc (TSLA.O) said on Monday it would raise about $1.5 billion through its first-ever offering of junk bonds as the U.S. luxury electric car maker seeks fresh sources of cash to ramp up production of its new Model 3 sedan.

The move to issue junk bonds – lower-quality investments that offer higher yields – represents a bet by Tesla Chief Executive Elon Musk that bond investors will be as hungry as stock investors to back the company on expectations that its Model 3 will be a hit.

Tesla shares are up 67 percent this year, pushing the company’s market value to about $60 billion, above that of top U.S. automakers General Motors Co (GM.N) and Ford Motor Co (F.N), even though Tesla has yet to make an annual profit.

http://www.reuters.com…   Tue.,  08  August 2017