According to a report,Tesla has delayed a bond offering that was worth more than $1 billion.
According to people familiar with the matter, Musk's company was going to issue bonds backed by leases on its cars, but has put the plans on hold. The company did not reply to the request for comment.
Since the beginning of the year, the company has issued bonds that are backed by the loans it makes to customers for vehicles. The idea is that with the help of major investment banks,Tesla will bundle its loans together into securities and sell them to investors, who will receive an income stream.
Many companies have stopped offering bonds because of the volatile financial markets.
Russia's invasion of Ukraine and central banks' moves to raise interest rates to tame inflation have caused turmoil for bonds.
The yield on the 10-year US Treasury note, which sets the tone for borrowing costs in the US and around the world, has been on a wild ride. Prices affect yields.
It rose sharply at the start of the year, only to fall when the war began, as investors braced for the Federal Reserve to raise interest rates aggressively. The Fed raised interest rates on Wednesday.
The S&P 500 investment grade corporate bond index has fallen almost 8% so far this year as the Fed prepares to reduce the amount of money it gives to companies.
The war in Ukraine has halted at least seven of the deals.
Musk said on Sunday that his company has come under pressure from global inflation.
Prices of energy, wheat, metals and other commodities have gone up because of Russia's invasion of Ukraine.
According to the head of 2 hotel and housing exchange traded funds, 7 real-estate stocks and REITs can deliver returns as inflation soars to 7.9% because of their significant pricing power.
All Rights Reserved © 2024
