Tesla (TSLA) Stops $1 Billion Bond Sale - Report

Tesla (NASDAQ: TSLA) has postponed its $1 billion bond sale backed by car leases, marking the third delayed asset-backed bond deal in the past week, according to Bloomberg.

Prior to the halt, Tesla’s bankers have already placed a significant number of bonds with fund managers, according to reports. However, economic risks including rising inflation and the war in Ukraine have driven short-term interest rates in the past few weeks, urging issuers to halt their deals until the market volatility eases.

Before Tesla, World Omni has halted an auto-backed bond sale on Friday. Furthermore, U.S. fintech company Affirm also delayed its debt offering backed by consumer installment loans.

A minimum of seven debt deals have been delayed since Russia invaded Ukraine. Several mortgage bond and residential mortgage bond sales were halted in February due to market weakness. Moreover, the Federal Reserve adopted an aggressive approach to combating inflation, approving its first interest rate hike in more than three years on Wednesday.

Tesla’s asset-based security (ABS) sale, “TESLA 2022-A”, began on March 7, followed by pricing guidance shortly afterward. The majority of tranches got sold and the pricing was imminent, but the communication on the offering died down before the carmaker halted it.

“Investors are never pleased when they put in all the work to analyze a deal and then it is pulled,” said John Kerschner, the head of U.S. securitized products at Janus Henderson.

By Senad Karaahmetovic | [email protected]

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