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S&P Slaps a Junk Rating on Tesla’s $2.9 Billion Debt

Agency concerned about long-term viability, narrow product niche.

by on May.29, 2014

Despite its stock rising more than 40% this year, Standard & Poors gave Tesla's $2.9 billion of debt a junk rating.

It may be the darling of Wall Street investors, but financial ratings agencies are far less smitten with California battery-carmaker Tesla Motors.

Standard & Poors gave Tesla’s $2.9 billion debt a rating of B-, which is considered “junk,” based on concerns about the company’s viability in the long term. Tesla boasts a market cap of $26 billion, which is almost half that of General Motors and more than a third of the value of Ford.

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Not surprisingly, Tesla officials pooh-poohed the rating. (more…)

Toyota Topsy-Turvy with $7.7 Billion Quarter Loss

Revenues dive 71%, with no upturn in sight. Future prospects are grim with another $6 billion loss predicted.

by on May.08, 2009

Akio Toyoda, CourtesyToyota

Akio Toyoda, the founder of the company's grandson, takes over next month as more losses are predicted.

Toyota Motor Corporation finished off fiscal 2009 with a huge $7.7 billion loss during the fourth quarter of the traditional Japanese fiscal year, which ended March 31. The fourth quarter loss left the Japanese auto giant with a decidedly non-traditional full-year loss of $4.4 billion, the largest in the company’s 71-year history. Net revenues dropped 22%.

Toyota also released guidance that it expects another loss ¥550 billion or nearly $6 billion for the coming year. The company, used to never-ending expansion, is having extreme difficulties managing contraction.

“Both revenues and profits declined severely during this period,” said President Katsuaki Watanabe, who is being replaced next month by Akio Toyoda, the founder of the company’s grandson.

“The negative impact was a consequence of the significant deterioration in vehicle sales, particularly in the U.S. and Europe, the rapid appreciation of the yen against the U.S. dollar and the Euro and the sharp rise in raw materials.”

Subscribe to TheDetroitBureau.com“It appears that it will take some more time before the financial markets in the U.S. and Europe normalize and the global economy recovers,” Watanabe predicted

The Japanese automaker reported that North American vehicle sales dropped more than 25% to 2.21 million units. The North American unit also finished the fiscal year with a ¥390 billion loss or a -$4.2 billion based on an exchange rate of ¥93 to the dollar

“The decrease in operating income was mainly due to decreases in both production volume and vehicles sold, and increases in the provision for credit losses, net charge-offs and allowance for residual value losses in sales finance subsidiaries in the United States of America,” Toyota said.    (more…)