Tesla's Bond Trades at Face Value for First Time Ever

Tesla's bond performance underscores the successes the electric car maker has been enjoying.
Donna Fuscaldo

Tesla's successes of late and the roaring stock price has led to its $1.8 billion bond to trade at face value for the first time ever. 

According to media reports the high-yield bond, which Tesla issued in 2017, reached a record high Wednesday trading at face value or 100-cents-on-the-dollar.

That's a far cry from years pasts when the bond was trading at 81 cents-on-the-dollar as Tesla grappled with production delays and snafus. Tesla's bond matures in 2025. At that point, investors get paid out. The hope is that it will trade above face value, making the investors a profit.


Tesla keeps on having successes 

But things are changing for the electric car maker which has had sales and manufacturing successes over the past few months. There was the surprise third-quarter profit that started the stock's ascent. Then there was the Chinese gigafactory which was completed ahead of schedule and delivered the first cars in China earlier in January. It also delivered a record number of EVs in 2019. 

And we can't forget the launch of its much anticipated Cybertruck. With its electric SUV coming soon and with demand for electric vehicles growing investors see good times ahead for Tesla. 

The fact that Tesla's bond has reached face value is progress and meshes with ascent Tesla's stock has seen in recent weeks.  Shares are up 14% year-to-date. 

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Tesla is the largest U.S car marker

News of the bond's ascent came a day after Tesla became the largest automaker the U.S. has ever seen. With a market capitalization of $84 billion it surpassed Ford's peak of $80.8 billion.  It was already worth more than General Motors.  

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