Morning Commentary: Tesla convertibles active in early trading on uplift in stocks

By Abigail W. Adams

Portland, Me., April 3 – While trading volume continued to be light in the convertibles space early in Tuesday’s session, Tesla Inc.’s three tranches of convertible notes remain active as the electric car manufacturer continues to occupy the headlines.

The convertible notes saw little change in outright trading prices as Tesla stock climbed early in the session. Tesla’s 0.25% convertible notes due 2019 continued to trade in the 98 to 99 range early Tuesday.

Tesla’s 1.25% convertible notes due 2021 continued to trade around 97. Tesla’s 2.375% convertible notes due 2022 were up slightly on an outright basis with trades in a range of 102 to 104, according to Trace data.

The soon-to-mature convertible notes Tesla took on when it acquired Solar City Corp. continue to struggle. The 1.625% convertible notes due 2019 continue to trade in the 91 to 92 range. The last trade of the 2.75% convertible notes was on Monday at around 98.

Tesla stock was up to $262.55, an increase of 3.99%, early in Tuesday’s session.

Tesla has struggled since last week when the company experienced an onslaught of negative publicity, a credit downgrade and speculation it would again miss its production target for its Model 3 sedans and would need to raise more capital to prevent bankruptcy.

Tesla stock was up early Tuesday after the company reported it had produced 2,020 Model 3 sedans in the last week of March.

While still missing its production target of 2,500 Model 3 sedans per week by the end of March, Tesla announced it expects to ramp up production rapidly, staving off any need for additional financing.

While Tesla has stated there will be no need for an additional capital raise, Bloomberg reported the company will run out of funds before the end of the year without more financing.

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