Summary
This 8-K filing from Tesla, Inc. on March 7, 2019, details two significant financing developments. Firstly, a subsidiary in China secured an unsecured 12-month term facility of up to RMB 3.5 billion (approximately $520 million USD at the time) specifically for its Gigafactory Shanghai. This facility, non-recourse to Tesla's parent company, bears interest at 90% of the People's Bank of China's one-year rate for RMB-denominated loans and one-year LIBOR plus 1.0% for USD-denominated loans. Secondly, Tesla amended and restated its existing Asset-Based Lending (ABL) Credit Agreement. This amendment significantly increases the total lender commitments by $500 million to $2.425 billion and extends the maturity date for the vast majority of these commitments from June 2020 to July 2023. The agreement also allows for up to an additional $200 million in revolving commitments and enhances the letter of credit subfacility. These actions collectively demonstrate Tesla's ongoing efforts to secure capital for its strategic expansion, particularly for Gigafactory Shanghai, and to strengthen its overall credit facility.
Key Highlights
- 1Secured RMB 3.5 billion unsecured term facility for Gigafactory Shanghai construction and production.
- 2The Gigafactory Shanghai loan is non-recourse to Tesla's parent assets.
- 3ABL Credit Agreement increased by $500 million to $2.425 billion in total commitments.
- 4Extended maturity date for the majority of ABL commitments to July 1, 2023 (from June 10, 2020).
- 5ABL Agreement permits up to an additional $200 million in revolving commitments.
- 6Increased letter of credit subfacility from $200 million to $400 million under the ABL Agreement.