Key terms are interest rate (coupon) and conversion premium. These are not printed on preliminary prospectus and will be printed on the final once the pricing is determined. They way this works is that underwriters (big banks listed on the first page) go to the market (long only and hedge fund investors) with a range for coupon and conversion premium. Investors will express interest somewhere in the range and the instrument will be priced tomorrow at close to get the right investors and best pricing for Tesla. We'll see the final terms once the convert is priced tomorrow after close, but qualified investors already have offering ranges.
Generally, converts have much lower interest than straight debt because they offer equity upside to investors once the stock goes above the conversion price. Tesla is high volatility stock, so the convert pricing will be attractive for the company (low coupon / high conversion premium) because that embedded option is valuable to convert investors.
Generally, converts have much lower interest than straight debt because they offer equity upside to investors once the stock goes above the conversion price. Tesla is high volatility stock, so the convert pricing will be attractive for the company (low coupon / high conversion premium) because that embedded option is valuable to convert investors.