Tesla’s junk bond tanks to 87 cents on the dollar after downgrade

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.