Tesla Raises USD977.5 Million in Public Offering of 2.375% Notes Due 2022

Published: Mar 15 2017
Deal Summary

Tesla, Inc. (formerly Tesla Motors, Inc), an automotive company engaged in designing, manufacturing of electric vehicles and energy storage products, has completed the public offering of 2.375% convertible senior notes due March 15, 2022, for gross proceeds of USD977.5 million. The offering includes over-allotment option of USD127.5 million which has been exercised by the underwriters. The company received net proceeds of USD965.9 million. Interest on the notes will be paid semiannually in arrears on March 15 and September 15 of each year, beginning from September 15, 2017.

Holders of the notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2021, only under: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2017 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the notes on each trading day; (ii) during the five business day period after any five consecutive trading day in which the trading price (as defined below) per USD1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of its common stock and the conversion rate on each such trading day; or (ii) upon the occurrence of specified corporate events. On or after December 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time. Upon conversion of notes, the company will deliver cash, shares of its common stock or a combination of cash and shares of its common stock.

The conversion rate with respect to the notes will initially be certain shares of common stock per USD1,000 principal amount of notes (equivalent to an initial conversion price per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the company will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event in certain circumstances.

Goldman, Sachs & Co., Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Credit Suisse Securities (USA) LLC acted as joint book running managers to the company for the offering.

Deal History:

Announced/Pricing: On March 17, 2017, Tesla, Inc., has priced the public offering of 2.375% convertible senior notes due March 15, 2022, for USD850 million.

Filing: On May 18, 2016, Tesla filed a prospectus with the US Securities and Exchange Commission (SEC) for public offering of securities. The company from time to time may issue senior debt securities, subordinated debt securities, junior subordinated debt securities, common stock, preferred stock, depository shares, warrants, rights purchase contracts, and units.

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