Tesla debt lifted out of 'junk' by Moody's

Moody's Investors Service has lifted its rating on Tesla Inc.'s (TSLA) debt to Baa3, the first rung of investment grade. The outlook is stable, the ratings agency said. The new rating "reflects Moody's expectation that Tesla will remain one of the foremost manufacturers of battery electric vehicles with an expanding global presence and very high profitability," it said. It also took into account Tesla's "prudent" financial policy and management's operational track record, Moody's said. Liquidity "will remain very good, underpinned by a very sizeable and growing balance of cash and investments, prospects for free cash flow of more than $7 billion, and limited debt maturities in the next two years," it said. As of Tuesday, Tesla shares have lost 38% in the last 12 months, compared with losses of about 11% for the S&P 500 index.

-Claudia Assis

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03-21-23 1100ET

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