Tesla fans snap up bonds tied to car maker's leases, its first such offering during pandemic - MarketWatch

Tesla Inc. TSLA, -0.77% saw high demand this week for a bond deal tied to leases on its electric vehicles, a first of its kind during the pandemic. As investors piled orders into the 8-tranche bond deal, the car maker was able to borrow more than $700 million at cheaper levels than initially anticipated. Specifically, its largest $215 million slug of AAA-rated bonds that mature in 1.1-years cleared the market at a spread of 35 basis points above a risk-free benchmark to yield 0.56%. Investors were pitched a slightly meatier spread in the area of 50 to 55 basis points earlier in the week, as bankers sought to drum up interest in the offering. The spread is the level investors earn on bonds over a risk-free benchmark, like U.S. Treasurys [S: tmubmusd10y]. Tesla's riskiest Ba2-rated class of 2.71-year bonds cleared at a yield of 4.6%, according to an investor tracking the offering. Tesla stock fell 0.8% Thursday, as did much of the broader equities market, after data showing the U.S. second-quarter gross domestic product fell by a record 32.9%. Shares still have outpeformed for the year, up 255.6%.

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