Tesla Is Now Investment-Grade Rated (by Moody’s)
Earlier this week, Moody’s upgraded Tesla to investment-grade status (Baa3) as they see Tesla maintaining its position as one of the leading manufacturers of battery electric vehicles in its global expansion. Moody’s also cited Tesla’s expanding product offerings, including their early production of the Cybertruck scheduled for end-2023’s launch, its regional production facilities and increased focus on the efficiency and financial leverage that’s well below one time after Tesla repaid ~US$10 billion of debt in the last 3 years.
What are the benefits of such an investment-grade rating?
1. Cheaper financing/borrowing cost - Investment-graded companies gain access to loans/bonds with lower interest rates as they are typically seen as “safer investments. This ultimately means better free cash flow for Tesla in the future.
2. Blue chip status - A company is usually treated as a legit blue-chip company if they received at least two agencies’ investment-grade rating, in this case, from S&P Global Ratings (back in October) and Moody’s.
While this is great news, we still have lots of room for Tesla to climb up the investment grade rating ladder (refer table below), and not to forget, Fitch has yet to grant their investment grade rating to Tesla! Exciting times ahead for TSLA investors.
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sincere Hamster_2458 : This is very important to Tesla.
70617193 : Take off
Ziet Invests OP sincere Hamster_2458 : of course it is!
Ziet Invests OP 70617193 : lesgoo
earning cash : It's important to learn to read. You said I'd be all in at the speculative level. The investment level is just hehe...