Tesla is preparing to launch a $783 million debt sale backed by car leases from prime borrowers, adding to a growing wave of automotive asset-backed securities (ABS) in the market.
The transaction, led by Societe Generale, will be Tesla’s second ABS deal this year and is expected to price next week, according to a source familiar with the matter, reports Bloomberg.
In March, Tesla issued a $750 million ABS deal with a 5.53% coupon on its top tranche. This upcoming sale will continue Tesla’s strategy of tapping into the ABS market, though it does so less frequently than other major automakers like Ford and GM.
Last year, Tesla’s securitizations reached nearly $4 billion—its highest yet—while Ford recently priced a $1.7 billion deal on Thursday. The ABS market has seen a surge in activity as interest rates have begun to decline and spreads have narrowed, pushing issuance closer to the record levels seen in 2021.
Tesla will report its Q3 earnings on October 23, 2024. Before this, it will hold its Robotaxi event on October 10 in California.