Tesla to offer $1.6B in bonds to fund battery factory

PALO ALTO, Calif., Feb. 26 (UPI) -- Tesla Motors will issue $1.6 billion in bonds to fund its battery factory, aimed at manufacturing low-cost batteries.

The bond offering will be equally divided between convertible senior notes due 2019 and another round of bonds due 2021. The car manufacturer also plans to offer underwriters a 30-day option to purchase an additional $120 million due 2019, and an additional $120 million, due 2021. This would bring the total offering to $1.84 billion.

The announcement precedes its plans to set up a battery factory in the U.S. to manufacture cheaper lithium-ion batteries that could potentially lower the costs of its cars and open its products to a mass-market. Tesla and its CEO Elon Musk have been referring to the project as a 'gigafactory.'

Tesla has been on the rise in the last few months, with both its cars and stock value doing very well. The stock closed today at $253.00, up 2 percent.

[USAToday] [Bloomberg]