fabriziof
Forumer storico
NEW YORK (Reuters) - The cost to insure debt holdings in electric carmaker Tesla Inc rose to its highest-ever level on Friday as the bond market reflected growing worries about a default, following the news that Chief Executive Elon Musk had been accused of fraud by federal regulators.
Tesla's 5-year credit default swap <TSLA5YUSAX=MG> hit its highest price ever on Friday, the day after the U.S. Securities and Exchange Commission said it was suing Musk and pushing for his ouster. The agency said he made a series of "false and misleading" tweets about potentially taking Tesla private last month.
Musk said on Thursday he had done nothing wrong. The company's shares were down 12.3 percent at $269.72 (206.8 pounds) on Friday afternoon.
It costs about $71,300 to insure $1 million of the electric carmaker's debt, plus an upfront cost of around 22.45 percent, which was also at an all-time high, representing a total of 29.58 percent of the face value of the company's 2025 junk bond <88160RAE1=RRPS>, or around $295,000.
Doubts were evident elsewhere in the market. Trading volume of the 2025 junk bond <88160RAE1=RRP> ballooned to $34 million on Thursday, versus $6 million on Wednesday, $1 million on Tuesday and $7 million on Monday, according to Reuters trading sources. Traders were quoting the junk bond at 87 cents early on Thursday morning. As of Friday, it was at 84 cents on the dollar.
Tesla's 5-year credit default swap <TSLA5YUSAX=MG> hit its highest price ever on Friday, the day after the U.S. Securities and Exchange Commission said it was suing Musk and pushing for his ouster. The agency said he made a series of "false and misleading" tweets about potentially taking Tesla private last month.
Musk said on Thursday he had done nothing wrong. The company's shares were down 12.3 percent at $269.72 (206.8 pounds) on Friday afternoon.
It costs about $71,300 to insure $1 million of the electric carmaker's debt, plus an upfront cost of around 22.45 percent, which was also at an all-time high, representing a total of 29.58 percent of the face value of the company's 2025 junk bond <88160RAE1=RRPS>, or around $295,000.
Doubts were evident elsewhere in the market. Trading volume of the 2025 junk bond <88160RAE1=RRP> ballooned to $34 million on Thursday, versus $6 million on Wednesday, $1 million on Tuesday and $7 million on Monday, according to Reuters trading sources. Traders were quoting the junk bond at 87 cents early on Thursday morning. As of Friday, it was at 84 cents on the dollar.