Re:Tesla Model 3 = 24% of Small and Midsize Luxury Car Sales...
by dragontamer on Monday October 07, 2019 @01:00PM
(#21183154)
> Refinancing their bonds at a lower interest rate is an entirely reasonable business decision vs having to pay them off.
Tesla's 2019 Bonds were initially 0.25%. They were rolled over into 2.00% bonds due 2024. Furthermore, Tesla paid hundreds-of-millions of dollars for this opportunity. I've seen estimates suggest that the "real" price (once the hundreds-of-millions are factored in) suggests a "real price" of ~8% on the 2024 bonds. (That is, pretending that the hundreds-of-millions Tesla paid for the opportunity to borrow money is instead "part of the bond", and suddenly the 2% bond is really closer to a traditional 8% bond).
Look: I get it. They didn't make money from the Nevada Gigafactory and needed the cash severely to fund Gigafactory 3 in Shanghai.
I'm just saying that when all of this debt hits them come 2022 (let alone the 2024 "recycled" debt to pay off 2019) Tesla will be in a much worse position.
Tesla's 2019 Bonds were initially 0.25%. They were rolled over into 2.00% bonds due 2024. Furthermore, Tesla paid hundreds-of-millions of dollars for this opportunity. I've seen estimates suggest that the "real" price (once the hundreds-of-millions are factored in) suggests a "real price" of ~8% on the 2024 bonds. (That is, pretending that the hundreds-of-millions Tesla paid for the opportunity to borrow money is instead "part of the bond", and suddenly the 2% bond is really closer to a traditional 8% bond).
https://www.bloomberg.com/news/articles/2019-05-03/tesla-rai...
Look: I get it. They didn't make money from the Nevada Gigafactory and needed the cash severely to fund Gigafactory 3 in Shanghai.
I'm just saying that when all of this debt hits them come 2022 (let alone the 2024 "recycled" debt to pay off 2019) Tesla will be in a much worse position.