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Comment by hristov | Hacker News Reader

Ok, even though i am generally pro tesla and like musk, in order to prevent this from becoming a total worshipfest i will provide some facts that elon is not sharing.

It is true that tesla has made all their payments under the doe loan agreement. But they were not in total compliance with said agreement. The agreement required that tesla keep certain financial ratios up to certain levels, and tesla failed to do that. As a result, tesla asked trhe government to change the terms. The government complied but wanted something in exchange. What they wanted was early repayment of their loans. That is why he is talking about early repayment. And that is probably one of the reasons why they raised extra money (although elon is unlikely to admit that).

So that is the full story. It is no big deal, i think tesla are very unlikely to default on the loan, but elon was definately not giving you all relevant info.

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Oh definitely so. But his statements have no sense of any of that, one would never suspect anything is being withheld, they come across perfectly sincere and warm and from him and not from some lawyer, it's masterful.

Yeah, there's some dodgy stuff, a lot of information about these cars, such as the reality about their batteries and how much energy they really use to go from A to B over time has high spin when I start looking into details. Was genuinely surprised.

Thanks for the details about what the financing is really about, that's very interesting info.

I feel it too. His statements are so nice and logical, the truth becomes secondary. That's one talented advocate. Let's instead condemn reality for lacking truth and beauty.

Well, he seems to address this directly where he states:

"We did suggest that holding nine months worth of principal payments in advance in a reserved account was a bit extreme and, moreover, was never part of our original loan agreement. The DOE agreed and reduced the advance payment reserve account to six months."

You saying

"keep certain financial ratios up to certain levels, and tesla failed to do that. As a result, tesla asked the government to change the terms"

...doesn't seem to add to or contradict his statements.

So unless you can clarify, your statement that "that is the full story ... elon was definitely not giving you all relevant info." seems inaccurate.

Financial ratios and/or debt covenants compared to a reserved cash account - two different things. Sure, the cash account can be a small part of a debt covenant but is usually just that - a very small part.

Which debt covenants were breached? Often times they put these checks in when they think something bad is going to happen. Then a couple of years down the line they mean absolutely nothing, are breached (usually because the company has forgotten about one of them and accidently breaches them) and need to be restructured with the lender asking for something in return.

Sounds like something like the above happened?

The ratio I was talking about was the debt/ebitda ratio. See e.g.:

http://www.investorguide.com/article/11088/tesla-tlsa-crashe...

He specifically mentions the 9-month to 6-month escrow switch in the post; are you talking about something different?

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