Tesla and Deutsch Bank have wrapped up a five-tranche sale in which the bank sold off $499 million worth of bonds backed by solar equipment loans.
Per Bloomberg, the five debt tranches all received investment-grade designations from Fitch Ratings, and the top tranche had a 4.83% coupon. Unsurprisingly, the debt was in high demand, and unlike other debt options on the market, this debt came with borrowers who already had high credit scores.
This is not the first time Tesla has sold off solar-related bonds. After it purchased SolarCity in 2016, the company utilized bond sales in solar for the first time. Solar-based bonds have seen a massive increase in popularity since 2016. According to Bloomberg News, solar-related collateral jumped to $5 billion in 2024 alone.
So, Tesla’s move comes as no surprise, as it is another opportunity to take advantage of a popular market with investment-grade debt that stands out in a sea of available mediocre solar-backed debt.
These kinds of debt sell-offs are normal for Tesla and other automakers. Over the past several years, Tesla has focused on selling off asset-backed and prime auto loan debts. So far in 2024, Tesla has issued around $2 billion in asset-backed debt, including $783 million raised through auto lease-backed debt sell-offs in early October.
