This past week Tesla filed plans (ABS-15G) with the U.S. Securities and Exchange Commission to issue bonds backed by it’s leases on its cars.  Tesla will be establishing a Tesla Auto Lease Trust and they plan to price the bonds early next week.  The initial transaction (2018-A) will be underwritten by Citigroup, Deutsche Bank and Bank of America Merrill Lynch.

You can check out the ABS-15G filing from Tesla here, SEC filing.

The Financial Times (behind paywall) notes:

The leasing programme has left $3.8bn of vehicles on Tesla’s own balance sheet, and the cost of funding new operating leases consumed $1.1bn of cash in the first nine months of last year.

Investor demand for so-called auto asset backed securities (ABS) — bonds backed by car loans or lease payments — has been revving up, meaning costs have come down for borrowers. Issuance hit a post-financial crisis high in 2017.

The new Tesla ABS is expected to price early next week with a maturity of February 2020, according to multiple people with knowledge of the sale.

As I shared earlier in the article, Tesla announces Feb 7 as Q4 earnings results date, here’s what to expect, Tesla will be reporting earnings on Feb 7 and one of the key highlights will be cash balance.  This extra $546M in new funding will help add to Tesla’s cash balance and help them through the Model 3 production ramp.  It remains to be seen if Tesla will need additional cash through a new capital raise or not.

The new 2018 Nissan Leaf was revealed this week with an EPA-rated 151 mile range.  There’s lots of media outlets and reporters trying to compare the Nissan Leaf with the Tesla Model 3.  However, there’s really very little to compare between the Leaf and the Model 3.  In fact, here’s why I think the Nissan Leaf and Tesla Model 3 are not competitors and really shouldn’t be compared to each other.

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