Tesla seeks $1.5 billion junk bonds issue to fund Model 3 production

[RE2Boys]

https://www.fidelity.com/news/article/top-news/201708070620RTRSNEWSCOMBINED_KBN1AN13I-OUSBS_1



'The effective yield on 7-8 year single B rated bond, the class for a Tesla issue, is 5.5 percent, according to Bank of America Merrill Lynch. However, the Tesla bond price has not been set and factors including its lack of borrowing history and its attractiveness as an environmentally friendly “green” issuer could affect the interest rate the car company has to pay."

As much as I admire the Tesla vehicles, would you lend them money??

 

[Richard4444]

Is a B rated bond now a junk bond ?

Rich

 

[Blue Collar Guy]

Is a B rated bond now a junk bond ?

Rich

If I invested any meaningful amount into them, they would definitely turn to junk

 

[jazz4cash]

No, I wouldn't buy their bonds.

 

[Totoro]

Is a B rated bond now a junk bond ?

Rich

Yes. B is several steps below investment grade BBB-

A bond is considered investment grade or IG if its credit rating is BBB- or higher by Standard & Poor's or Baa3 or higher by Moody's. Bonds that are not rated as investment-grade bonds are known as high yield bonds or more derisively as junk bonds.

 

[pb4uski]

And to be clear B has been junk for as long as I can remember... no change.

I'm sure that the ETFs that I invest in will likely include Tesla in their holdings so the answer is yes... it is likely that I will invest some money in this issuance.

 

[Winemaker]

I can't see Tesla ever outliving their hype.

 

[travelover]

I can't see Tesla ever outliving their hype.

The company is worth more than General Motors. What could go wrong?

 

[brewer12345]

Is a B rated bond now a junk bond ?

Rich

"B" is for "Bestest," didn't you know?

Rating scale is generally:

AAA
AA
A
BBB
BB
B
CCC
<you don't want to know>

B is solidly junky junk.