0 Answers: What does "prices of Tesla bonds issued in August plunged to all-time low last week" mean?

Question

‘does that mean Tesla is only capable of receiving loans is deceasing? ‘

That makes no sense.

A falling bond price means there are fewer buyers for bonds – which were sold by the company – on the secondary market. More people want to sell them than there are buyers for them. This means that buyers are not willing to take the risk of owning them – they see a greater risk of the company defaulting on the interest payments. They see the company as having a greater chance of failing and filing for bankruptcy, which could make those bonds worthless.

Going forward, continued weakness in the secondary market will mean that Tesla will have a much harder time raising capital through a sale of additional bonds.

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Anonymous 8 months 0 Answers 53 views 0

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