Letters of credit (L/Cs) are included in a new working capital financing deal secured by electric car new-start, Tesla Motors.

The California based hi-tech manufacturer is currently transitioning from funding provided substantially by US government technology development facilities to commercial financing terms.

Bank support

According to forms submitted to the US Securities and Exchanges Commission, Tesla has secureda US$500 million line of credit from a group of banks.

The deal includes Bank of America, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo and Credit Suisse.

Commercial terms

Tesla is eligible to obtainup to US$500 million of senior secured asset-based revolving credit, which may be used at any time.

The agreement allows for the line of credit to be increased by an additional US$250 million at some point in the future, subject to certain conditions.

Also included in the credit agreement are a US$100 million L/C sub-facility and a US$40 million loan sub-facility.

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