SolarCity Bailout Analysis

[schonelucht]

Does anyone know if the (SolarCity) convertible due by the end of the year is recourse against all Tesla assets or just SolarCity assets?

 

[Cosmacelf]

Does anyone know if the (SolarCity) convertible due by the end of the year is recourse against all Tesla assets or just SolarCity assets?

Why does it matter? It’ll get paid off...

 

[schonelucht]

It's behaving like it will not...

 

[Doggydogworld]

Does anyone know if the (SolarCity) convertible due by the end of the year is recourse against all Tesla assets or just SolarCity assets?

I'm not aware that Tesla issued any specific guarantees as part of the merger. That said, I can't imagine they'd let SCTY file BK as it would be a PR disaster. Just imagine the gloating from Chanos and the other old SCTY shorts who are now short TSLA.

 

[LN1_Casey]

I'm not aware that Tesla issued any specific guarantees as part of the merger. That said, I can't imagine they'd let SCTY file BK as it would be a PR disaster. Just imagine the gloating from Chanos and the other old SCTY shorts who are now short TSLA.

Ick! You'd bet they'd make the doomsday call for TSLA if Solar City went.

 

[tander]

Does anyone know if the (SolarCity) convertible due by the end of the year is recourse against all Tesla assets or just SolarCity assets?

It was treated as a merger not an acquisition or subsidiary right? I would think it's all Tesla now but I guess you'd have to check the fine print I guess. Can you still buy those, what is the cusip?

 

[schonelucht]

Yeah, it still trades. CUSIP 83416TAC4. Not super liquid and not for retail investors.

 

[Cosmacelf]

Yeah, it still trades. CUSIP 83416TAC4. Not super liquid and not for retail investors.

I don’t know what the restrictions are but I bought some of it soon after the merger announcement. It is Tesla debt now. The likelihood of Tesla defaulting on debt is pretty much zero in my mind but to each his own.

 

[Cosmacelf]

Yeah, it still trades. CUSIP 83416TAC4. Not super liquid and not for retail investors.

Yes, that's the CUSIP alright. My account shows the bond price at $93.8561, but as you say, not super liquid, so it is anybody's guess what the real price is. My guess is that you'd have to buy in the $200K-$500K volume range to be able to buy it at all. If you can buy it at that price, seems like a screaming deal to me. It is due November 1, 2019, so Tesla only has to be able to pay off or refinance this bond in 6 months and you'll have made 6.5% on your money for 6 months (plus 0.8125% for 6 months of the coupon).