Tesla seeks $1.5 billion junk bond issue to fund Model 3
The first mass-market Tesla vehicles have been delivered and now the company is looking to raise cash to help meet production needs.
Our Jasmine Haynes explains in today’s business report.
Tesla is looking to raise $1.5 billion as it hopes to increase production of the Model 3 sedan – its first mass market electric car. The first 30 Model 3s were delivered to employees at the end of July. At that time, CEO Elon Musk warned that Tesla was about to embark on “at least six months of manufacturing hell” – a statement that worried some investors. But he has since said the company should be able to overcome obstacles. But that will cost money and the company is burning through cash at a rapid rate, spending $1.2 billion in the second quarter preparing for the Model 3.
Americans slowed down their borrowing in June as the category that includes auto and student loans posted the smallest gain in a year, rising $8.3 billion.
The category that includes credit cards climbed $4.1 billion down from may’s $6.9 billion increase.
The federal reserve said overall consumer credit expanded by $12.4 billion for the month, down from may’s $18.3 billion increase.
Economists keep a close eye on the credit report for clues about the direction of consumer spending which accounts for about 70 percent of economic activity.