- Moody's Investors Service downgrades Tesla's credit, citing doubts about its Model 3 production schedule and saying it may have to borrow more in the near future.
- Tesla shares are also down sharply.
Tesla's bond price plunged Wednesday to its lowest level since the note was issued last year, sending its yield above 7 percent.
The price drop came a day after Moody's Investors Services cut Tesla's credit rating and changed its outlook to negative, citing doubts about the company's Model 3 production schedule. The credit rating company said the electric car maker will likely have to raise money in the future to meet cash needs.
The falling price of the bond and surging yield means it will be more costly for Tesla to raise funds in the debt market.
Tesla's 5.3 percent bond, issued last August and maturing in 2025, fell to 86.478 cents in trading Wednesday, with a yield of 7.7 percent, according to IHS Markit.
Moody's lowered its corporate rating on Tesla to B3 from B2 and lowered its rating on senior notes to Caa1 from B3.
Shares of Tesla were also sinking after the National Transportation Safety Board said it was investigating a fatal Tesla car crash. They fell 7.7 percent on Wednesday and 14.5 percent this week.