Aug. 13 (UPI) -- Tesla now says it plans to raise $1.8 billion in corporate bonds to help fund its new Model 3 electric car and other necessities -- an increase of an earlier fundraising estimate.
The company on Saturday said the money will help keep its balance sheet steady as it continues the manufacturing of the Model 3. Tesla expects to build 5,000 vehicles by the end of the year.
So far, the company says it has spent about $100 million a week to meet their manufacturing benchmarks.
The corporate bonds plan, first announced on Monday, is limited to major institutions, not private investors.
Originally, Tesla had planned to raise funds using equity instead of debt.
Moody's Investors Service assigned Tesla a B2 corporate family rating and a B3 rating on the company's offering of senior unsecured notes. They are speculative-grade, or "junk."
The unsecured junk bonds will mature in eight years and have an anticipated interest rate of 5.5 percent.
"Tesla intends to use the net proceeds from this offering to further strengthen its balance sheet during this period of rapid scaling with the launch of Model 3 and for general corporate purposes," Tesla said.
Previously, Tesla announced plans to spend about $2 billion in capital expenditures during the second half of the year to increase production of Model 3.
The $35,000 price of the new model is half the cost of its base Model S -- and is considered to be Tesla's first electric vehicle marketable to the middle class.
The company has received almost 500,000 reservations for the Model 3, with $1,000 deposits, although the first 30 cars were not delivered until July 29 to employees from its manufacturing plant in Fremont, Calif.,
In March, the company raised about $1.4 billion through a stock and debt offering.
Allen Cone contributed to this report.