S&P Global Ratings on Thursday advanced Tesla Inc.’s debt rating, leaving the company’s solvency measure just two steps away from the coveted investment grade rating.
S&P upgraded Tesla’s TSLA,
good at BB, from BB-, with positive outlook. Above, on the S&P scale, are BB + and A3, the first step of investment.
“S&P analysts” claimed that “Tesla’s growing liquidity has substantially reduced its financial risk.”
Related: Tesla’s market cap is approaching $ 600 billion
Tesla recently completed a $ 5 billion share sale and also raised $ 7.3 billion earlier this year through its previous share sale. The company is likely to end the year with more than $ 19 billion in cash and cash equivalents, reducing its net debt to “essentially zero,” S&P analysts said.
“In addition, the company continues to improve operational performance, becoming more efficient in production and advancing in its global expansion,” they said.
The positive outlook means that there is at least one in three likelihood that S&P may raise the company’s debt rating again over the next twelve months.
The move comes a day before Tesla is included in the S&P 500 index. SPX,
At the start of trading on Monday, Tesla shares will be part of the equity benchmark as they have been added at the same time.
Tesla shares have gained 676% this year, compared to S&P’s gains of about 14%.