(Bloomberg) -- Tesla Motors Inc. increased the size of its equity and debt offerings by 30 percent to as much as $1.08 billion to repay its U.S. loan and build up cash reserves.
The company said in an SEC filing that it plans to sell as many as 3.9 million shares for $92.24 apiece. Tesla CEO Elon Musk is due to purchase 1.08 million shares for about $100 million and convertible notes may raise as much as $648 million.
"Just two weeks ago, the thought of Tesla raising $1.1 billion of capital may have required a stock price in the $20s with significant dilution," Adam Jonas, a Morgan Stanley analyst,wrote in a report today.
Jonas also raised his target price for Tesla shares to $109 from $103, "making Tesla our new top pick in U.S. autos."
Tesla said it will use $452.4 million to repay an Advanced Technology Vehicles Manufacturing loan.
Tesla's early repayment sets it apart from Fisker Automotive Inc., which failed in a similar bid to profit from rechargeable autos, as well as large carmakers that aren't under pressure to reimburse the Energy Department.
The standard repayment schedule for Ford Motor Co.'s $5.9 billion loan and Nissan Motor Co.'s $1.4 billion loan is 10 years.
Fisker missed a loan payment, and is at risk of bankruptcy after halting output last year and firing most of its staff last month.
Tesla said that cash and cash equivalents as the end of March, adjusted for the fundraising, U.S. repayment and $50.9 million in hedging-related costs, would more than triple to $678.8 million, from $214.4 million.
Shares of the company, named for inventor Nikola Tesla, fell 75 cents, or nearly 1 percent, to close at $91.50 in Nasdaq trading today.
They have soared 172 percent this year through yesterday, compared with a 16 percent increase for the Russell 1000 Index.
"In terms of the overall run-up in the share price, I do think investors are not factoring in fundamental risks around margins and demand," said Ben Schuman, an analyst with Pacific Crest Securities, who rates Tesla a sector perform. "That said, the big market and likely positive near-term catalysts continue to fuel the run. It's difficult to tell when -- if ever -- we could see a correction."
Loans for Tesla, Ford, Nissan and Fisker were all awarded in 2009 under a program implemented by President Barack Obama.
The green-car loans, along with Energy Department funds for failed lithium ion battery manufacturer A123 Systems Inc. and solar-panel maker Solyndra LLC, have been a target of criticism from Republicans, including Senators Charles Grassley of Iowa and John Thune of South Dakota.
Darrell Issa, head of the House Oversight and Government Reform Committee, held hearings on Fisker's loans last month.
"In general, the Energy Department should develop informed and realistic expectations about loan recipients' ability to repay their loans," Grassley said in an e-mailed statement Thursday. "That didn't happen with Fisker, so it would be noteworthy and even surprising if another high-profile loan recipient is able to repay its loans."
Tesla and Fisker were lumped together as "losers" by Mitt Romney, the 2012 GOP nominee, as he campaigned for president last year.
Sarah Palin, the Republican 2008 vice presidential candidate, attacked Tesla last month in a Facebook comment as "Obama-subsidized" and the loan program as an "atrocious waste of taxpayer money."
Musk, 41, said in an interview this month there was a need for U.S. support following the 2008 recession. "Particularly given the timing of where the economy was, there was some merit to the government involvement," Musk said on May 2 in Hawthorne, Calif.
Tesla's funding plan comes after the company last week reported its first quarterly profit. The next day a Consumer Reports magazine review of the Model S scored the electric car, with a $69,900 base price, as among the best it's ever tested.
The carmaker arranged in March to repay its U.S. loan in five years, rather than the original 10-year period. Tesla completed drawing down the funds Aug. 31, 2012.
The company made a first loan payment of $12.7 million in December 2012 and a further $12.7 million payment in 2013's first quarter.
Under the original terms, the repayment schedule ended in December 2022. Goldman Sachs Group Inc. is managing the stock offering, and Goldman, Morgan Stanley and JPMorgan Chase & Co. are jointly managing the notes offering.
The underwriters have an option to buy as many as 509,069 additional shares, the company said. Musk will buy $45 million worth of stock in the public offering and $55 million worth in a private placement, Tesla said.
The company earlier said it aimed to raise as much as $830 million in the offerings.