Tesla signed $30 billion of committed, undrawn senior unsecured bank credit facilities on Tuesday, replacing an undrawn $5 billion revolver as it heads into a year of more than $25 billion in capital spending.
The package comprises a $20 billion three-year delayed-draw term loan, an $8 billion five-year revolving facility and a $2 billion 364-day revolver, according to a regulatory filing.
No loans were outstanding at signing, and Tesla “does not currently plan to draw on the facilities in 2026,” the filing said.
The company filed the report after the market close, with the shares having ended the day down 1.3% at $352.84.
How the Term Loan Works
Citibank is administrative agent on the term loan, which Tesla can draw no more than ten times during the 18 months after closing.
Any undrawn commitment falls automatically to $10 billion after a year and to $5 billion after 15 months, and lapses after 18 months.
The full $20 billion is therefore available only until September 2027.
Loans drawn under the facility mature on September 29, 2029.
Wells Fargo is administrative agent on both revolvers.
The five-year facility runs to September 29, 2031, and Tesla can request two one-year extensions.
It can be drawn in dollars, sterling or euros, and includes up to $500 million of letters of credit. The 364-day facility is due on September 28, 2027, with an option to extend drawn loans by a year.
Tesla can add up to $4 billion across the two revolvers, which would lift the whole package to $34 billion.
Costs Tied to Credit Ratings
Dollar borrowings pay Term SOFR or an alternate base rate, at Tesla’s election, while sterling borrowings are tied to SONIA and euro borrowings to adjusted EURIBOR, in each case plus a margin set by Tesla’s credit rating.
The same ratings determine the commitment fee on the revolvers and the ticking fee Tesla pays on the undrawn term loan.
The filing does not disclose the margins or fees, and Tesla will file the three agreements with its third-quarter 10-Q.
Fitch Ratings assigned Tesla a first-time BBB rating last week, matching S&P Global Ratings and one notch above the Baa3 from Moody’s.
Chief Executive Officer Elon Musk called the Moody’s rating “ridiculously low” in June.
In its rating report, Fitch said Tesla planned to be opportunistic in securing up to $30 billion in debt facilities, the amount it signed on Tuesday.
A Higher Liquidity Floor
The agreements require Tesla to maintain at least $5 billion of consolidated liquidity and restrict liens and debt at its restricted subsidiaries.
The revolver they replace, signed in January 2023 with Citibank as agent, required $1 billion of liquidity and carried a $2 billion accordion, according to Tesla’s filing at the time.
That facility was due to mature in January 2028, and Tesla terminated it with no borrowings outstanding and no early-termination penalty.
Some of its lenders are part of the new group.
Proceeds can be used for “general corporate purposes or for any other purpose not otherwise prohibited.”
Spending Outpaces Cash Flow
Tesla expects capital expenditure “in excess of $25 billion in 2026,” driven by AI compute and data centres, new production lines and a growing fleet of company-operated vehicles, it said in its second-quarter 10-Q.
It spent $8.28 billion in the first half, more than double the $3.89 billion a year earlier, against operating cash flow of $8.63 billion.
In the second quarter alone, $5.8 billion of CapEx exceeded $4.7 billion of operating cash flow by about $1.1 billion.
Meeting the guidance implies at least $16.7 billion of capital spending in the second half.
Tesla also paid $2.00 billion for its stake in SpaceX in the first half, which it carried at $3.01 billion on June 30 after a $238 million discount for resale restrictions.
Its 10-Q said the company intends to maintain “a strong balance sheet and sufficient liquidity, which may include additional funding.”
Fitch expects Tesla’s free cash flow to remain negative for at least the next several years and its leverage to rise as it borrows to fund part of its investment programme.
Tesla and SpaceX put the first phase of their joint Terafab chip complex in Grimes County, Texas, at about $16.8 billion in August.
The Balance Sheet
Tesla held $43.52 billion in cash, cash equivalents and short-term investments on June 30, down from $44.7 billion on March 31.
Its debt totalled $9.08 billion of unpaid principal, of which Tesla classified $2 million as recourse to the parent company.
The largest item was $5.89 billion drawn on a non-recourse working capital facility in China, with tranches maturing between September 2026 and March 2027.
The new facilities add parent-level capacity, and Tesla will pay commitment and ticking fees on them whether or not it borrows.
