Tesla Credit Default Swaps Imply Default Probability At A Tape 48%

The stock is downward $40.82 (-13.27%) at $266.70.
 
From ZeroHedge:

With Tesla stock plunging 13%, suffering its biggest 1 twenty-four hr menstruum drib inward years every bit the marketplace was forced to evaluate a globe inward which Elon Musk is no longer affiliated amongst the fellowship should the SEC become its want (a suggestion which according to Barclays could wipe out as much every bit $130 from the TSLA stock price), bond traders are likewise trimming their exposure, which inward plough has sent Tesla's default odds to a novel all fourth dimension high.

According to CMA, Tesla credit default swaps - i.e., the upfront cost of protection against default - rose over 1% to 22.8 points, the highest on record. This way that for every $10 1000000 inward protection, investors volition bring to pay $2.28 1000000 upfront. This likewise way that the implied probability of default over the side past times side v years is an all fourth dimension high of 48%.

Alongside the stock selloff, Tesla’s junk bonds barbarous to 84.75 cents on the dollar, downward one-half a cent.

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Tesla currently has $11.5 billion inward outstanding debt, of which European insurance giant Allianz is the biggest holder. At the destination of February, $920 1000000 inward convertible debt matures amongst a convert toll of $360. Tesla is currently trading 30% below that price, in addition to therefore it volition come upwards due every bit cash instead of equity for holders of those notes unless the stock somehow surges past times $90 inward the side past times side 4 months.

Making matters worse for Tesla is that the fellowship volition now, amongst the SEC trial inward play, close for sure postulate approximately other cash infusion earlier it reaches profitability, in addition to the novel working capital missive of the alphabet would hold out far harder to come upwards in addition to hold out to a greater extent than expensive afterwards SEC lawsuit, particularly if Musk is forced to footstep down....MORE