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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…)