Summary
Tesla, Inc. (TSLA) filed an 8-K on January 3, 2019, to report on material definitive agreements related to its vehicle leasing program. The company announced the termination of a 2017 warehouse credit facility following full repayment via a securitization of underlying leased vehicle assets. Concurrently, a new credit facility, the 2018 Warehouse Agreement, was established with substantially similar terms to replace the terminated one. This refinancing maintains Tesla's total lender commitment at $1.1 billion across its outstanding warehouse credit facilities. The new facility is secured by lease contracts and vehicles, with a loan interest rate generally based on LIBOR plus a fixed margin (approximately 3.9% at the time of filing). The facility has a draw period ending in August 2019 and a maturity date in September 2020, subject to certain conditions. This action is part of Tesla's strategy to support its direct vehicle leasing program without direct guarantee from the parent company.
Key Highlights
- 1Tesla's subsidiaries established a new $1.1 billion warehouse credit facility to support its direct vehicle leasing program, replacing a prior facility.
- 2The previous 2017 warehouse credit facility was terminated and fully repaid through a securitization of leased vehicle assets.
- 3The new 2018 Warehouse Agreement has substantially the same terms as the terminated 2017 agreement.
- 4The total lender commitment across outstanding warehouse credit facilities remains unchanged at $1.1 billion.
- 5Obligations under the new facility are secured by lease contracts and leased vehicles.
- 6The interest rate for the new facility is generally based on LIBOR plus a fixed margin, approximately 3.9% at filing.
- 7The new facility has a draw period ending August 16, 2019, and a maturity date in September 2020.