Tesla announces $1.5 bn bonds issue to fund Model 3

New York, Aug 8 : Tesla announced on Monday that it intends to raise about $1.5 billion in a bond offering, as the US luxury electric automaker seeks to fund the production of its new Model 3 sedan.

Shares of Tesla have risen 67 per cent this year and ticked down 0.49 per cent to close at $355.17 on Monday after the announcement, Xinhua reported.

The debt offering marks Tesla's debut in the junk bond market.

Moody's is rating the bond B3 with a stable outlook and Standard & Poor's assigned a "B-" rating for the bond issue.

Tesla said in a press release that it intends to use the net proceeds from this offering to further strengthen its balance sheet during this period of rapid scaling with the launch of Model 3, and for general corporate purposes.

While Tesla has received more than 1,800 reservations per day for the Model 3 since its launch in late July, Tesla CEO Elon Musk confirmed that he's working on "something special" for early reservation holders.

Tesla Model 3 is a major step for the California-based company, and priced around $35,000 each. It "achieves 215 miles (346 km) of range per charge" and is "designed to attain the highest safety ratings in every category."