- 1 Kirby's lenders to add $300m to credit line
- 2 Tesla Gets $300 Million Credit Line From Deutsche Bank
- 3 Deutsche Bank Extends Tesla $300M Credit Line (TSLA, SCTY)
- 4 Tesla Gets $300 Million Credit Line; Analyst Sees 'Execution Risk'
Kirby's lenders to add $300m to credit line
New York-listed articulated tug-barge and tank barge owner expands coffers for acquisition.
The Houston-based tank barge owner amended its credit agreement with a syndicate of commercial banks, including JPMorgan Chase, Bank of America, and Wells Fargo, that it will allow it to borrow up to $850m, up from a previous limit of $550m. The new credit line will also include a longer maturity date of 26 June, 2022.
The credit line carries lenders a variable interest rate based on either Libor or the agent bank’s prime rate, with a margin of 100 basis points.
Kirby may also receive a $300m increase in loan commitments in the form of revolving credit loans or term loans, subject to the banks' approvals.
Kirby has already borrowed $105m under the facility.
Tesla Gets $300 Million Credit Line From Deutsche Bank
Tesla can borrow up to $300 million for its vehicle leasing program through an agreement with Deutsche Bank as part of a broader effort to bolster the company’s finances.
In a filing with the U.S. Securities and Exchange Commission, Tesla said the new liquidity meant its own cash requirements for its direct leasing program would be “significantly reduced.”
As a result, Tesla (tsla) can raise fewer funds from the public market as it gears up for its much-anticipated Model 3 mass-market vehicle.
The amount outstanding from the loan and security agreement is due on Sept 20, 2018.
Tesla, which burned through over $600 million of cash in the first half of the year, faces a cash crunch as it ramps up manufacturing capacity for the Model 3 next year and completes construction of its massive “Gigafactory” battery factory in Nevada.
Elon Musk says $2 billion stock selloff isn’t linked to recent crash
Tesla’s planned $2.6 billion acquisition of SolarCity, which itself has pressing cash needs, will add to its liquidity issues. Combined, the two companies’ debt totaled $5.43 billion with a combined cash burn of $830 million last year.
Tesla said in previous SEC filing that it plans to raise additional money this year to help fund development and production of its new Model 3 sedan and build out a giant battery factory.
In August, the company said it had $3.25 billion in principal sources of liquidity as of June 30, 2016, but in July it repaid $678 million on a revolving credit line and planned to redeem $411 million of 2018 convertible notes, warning it could spend more on the securities.
The company also warned that the value of its secured assets had limited its ability to borrow under its asset-based revolving credit agreement with a syndicate of banks.
Deutsche Bank Extends Tesla $300M Credit Line (TSLA, SCTY)
Tesla Motors, Inc. (TSLA) CEO Elon Musk is trying to change the narrative that suggests he doesn't have a good handle on his company's finances. The fact that Tesla has a high cash burn rate has kept its stock in the reverse over the past three months as investors fear the company will lack enough capital to operate.
The San Francisco-based company has burned through over $600 million of cash in the first half of the year. But it now has a lifeline. On Wednesday, Reuters reported that the electric-car manufacturer had entered into an agreement with Deutsche Bank whereby Tesla can borrow up to $300 million for its vehicle leasing program, part of a broader effort to bolster the company's finances. (See also: Tesla to Raise More Capital.)
This news comes a day after reports that Musk was looking for ways to lower his company's operating costs. But how much will the $300 million help if Tesla doesn't fully embrace a more conservative approach to its vehicle production goals? Tesla intends to start volume production and deliveries of Model 3 in late 2017 and plans to accelerate its 500,000 unit build plan from 2020 to 2018.
Citing a recent filing with the U.S. Securities and Exchange Commission, Reuters noted that Tesla's own cash requirements for its direct leasing program would now be "significantly reduced." This means the company would still need to raise more money, albeit a lower amount than before, to fund its much-anticipated Model 3 mass-market vehicle. So could Tesla be gearing up to offer up more debt? (See also: Tesla Issues $2 Billion Offering To Fund Model 3.)
In May, the company announced a $2 billion secondary stock offering to finance its production schedule. Aside from promising to produce 500,000 cars in 2018, Musk raised the stakes even higher by promising to double the volume in 2020, which now requires another capital raise. And the fact that Tesla has acquired money-losing SolarCity Corporation (SCTY) has increased investors' angst. But how much of these issues has Deutsche Bank considered?
I went all out this year and bought my two sons Ipad Pro's, through MyVerizon website, and did it because they told me, via the chat boxes, that each line/each Ipad would be eligible for a $300 credit to my account.
Well, when I started calling to get the promo numbers, they said it was only for Smartphone new lines, not tablets. I told them to get on MyVerizon, even up to yesterday, and the promo button for buying an Ipad stated, "trade in an old smartphone (I have many), and set up new line (nothing about it needing to be Smartphone) get that same $300 credit per line". When their Customer Service saw this, they told me to call the Trade-In Group, and would not communicate any further.
Well, after hours on the phone, going around and around, they simply said too bad, no such promotion existed, changed the MyVerizon website, omitting that deal, etc. They say no offer ever included tablets, but they told me it did when I bought them, and the MyVerizon website had it.
Even though Ipad Pro's, with contract, are $250 discounted, they would not budge. Said I would have to return them to a store, then see what's happens if I try to buy them back using the contract approach and discount. Man, what a hassle for a long time customer..
Tesla Gets $300 Million Credit Line; Analyst Sees 'Execution Risk'
Tesla Motors obtained a $300 million credit line, but it needs billions of dollars in new funding for its ambitious plans. (Tesla)
Tesla Motors (TSLA) secured a $300 million credit line, but the luxury electric car maker will need billions of dollars more in funding soon to help finance major investments and acquisitions. Meanwhile, Cowen & Co. analyst Jeffrey Osborne initiated Tesla at underperform with a 160 price target, citing "execution risk."
Tesla disclosed in an SEC filing Wednesday that it obtained the line from Deutsche Bank (DB) for its vehicle leasing program.
Cash concerns over Tesla and SolarCity sent shares of Tesla down 10% last week and SolarCity 16%. Tesla, up 2% this week as of Wednesday's close, fell 2.2% Thursday to close at 197.36 on the stock market today . SolarCity, down 2.3% as of Wednesday, fell 3.4% Thursday to 17.44. SolarCity has now had 11th straight losing sessions.
"The company, while fundamentally well positioned for the long term, has a material amount of execution risk over the next 12 to 18 months," Cowen & Co.'s Osborne wrote in a Thursday research report.
He added that while he sees Musk as a "true visionary," he concedes that "a lot more can go wrong that can go right" for now.
Last week CEO Elon Musk urged Tesla workers to redouble efforts to cut costs and boost deliveries to be cash flow positive "at least for the next 4.5 weeks." That's according to a email to staff obtained by Bloomberg.
IBD'S TAKE: Shopping for a good auto stock? Try looking under the hood. Mobileye, which makes driver-assistance systems, is trading near a 50.28 buy point as it racks up autonomous vehicle alliances . After a huge run, chipmaker Nvidia is forming a bullish pattern .
Tesla has lost money in recent quarters and will do so again going forward as it steps up spending, so Q3 is "our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production," Musk wrote.
So Tesla's $300 million Deutsche Bank credit line, though insufficient, will help.
In the SEC filing, Tesla noted: "Due to the liquidity available under the Warehouse Agreement, Tesla's cash requirements for its direct leasing program are significantly reduced. As a result, there would be a corresponding reduction in both the amount of funds that Tesla may raise from the public market, as well as the amount of dilution to Tesla's existing stockholders from such fundraising activities."
The funds can be borrowed up to Aug. 31, 2017, and must be repaid by Sept. 20, 2018.
'What's Facebook?' Asks Elon Musk, As He Deletes Tesla, SpaceX Pages
3/23/2018 Tesla CEO Elon Musk ordered the deletion of the Facebook pages of Tesla and SpaceX, which collectively had about 2.6.
3/23/2018 Tesla CEO Elon Musk ordered the deletion of the Facebook.