On Monday, the Space X has taken a leveraged loan whose worth is more than $250 million.
According to numerous reports, the company was initially seeking to loan out $750 million. This smaller fragment of loan has been taken because of the deteriorating conditions of the brand during the period of fund-raising.
The financing was led by the Bank of America and this fund will help the Space X to push its project of sending the astronauts into the space and will eventually be followed with sending the humans to Mars.
The funding through loan was previously led by the Goldman Sachs, which had guided Tesla for going public.
Later the bank rejected the terms which were proposed which were regarding the future funding of the debt.
The previous equity funding which was done privately had valued the Space X for about $20 billion.
But the investors of loan were wary because of the records of the company which was burning cash while it was seeking for the expansion of its operations.
In the recent years, the market of leveraged loan has expanded drastically reaching a worth of $1.6 trillion.
Janet Yellen, the former Federal Reserve chair along with the IMF have raised doubts related to the quality of the deals because the companies are piling up more and more of debt in order to increase the earnings per share.
Tesla, which is another company owned by Elon Musk has also stepped earlier this year into the high yield market.
The other major technology based companies that have tapped the leveraged financing sector include some biggies like Netflix, Uber and WeWork. All these companies have taken the loans in the last 18 months.
The loan to the Space X was issued at 99 cents to a dollar along with a coupon of 4.25 percent.
Source: BusinessInsider, ConsultantInsider
