Also even if they did...Tesla can issue new debt to fund it - which would be more valuable to the debt holders because the'd now know there's a good chance they can sell it on.
The market can remain irrational a lot longer then you can remain solvent - and no one company is big enough to ignore this.
They could try to issue new debt. But who would want to acquire debt in a company that is about to be forced into bankruptcy by its creditors?
The second round of debt would be subordinated to the original round of debt, meaning that new debtholders would make back pennies on the dollar, if that.
Why? Nothing about the valuation has changed in this scenario - the valuation has in fact gone up because a large player has moved into the market and is (1) buying up all the debt instruments (so their value is going up and up and up) and (2) if you're an original investor, you still believe you'll make your money back on Tesla, so all you do is sell your holdings to Big Oil, and then offer the exact same terms again to Tesla to payback the original instrument. And it means you've already made your original money back, so you've got the cash to spare to do it.
Have participated in corporate debt structuring before.
Standard terms allow for debtholders to call in a debt before it matures if they have reason to believe the debtor will be unable to pay back the loan at the end of the term. With Tesla's long-standing liquidity concerns, it would be absolutely shocking (and could even constitute legal malpractice for the debtors' lawyers) if the debtors didn't have the right to call in the debt under such circumstances.
If you look at the charts they provide, nearly half of Tesla’s own and SolarCity-inherited debt is in the form of convertible bonds. To the best of my knowledge, convertible bonds trade off debt seniority for the potential upside of an equity vehicle.
It seems that the rest of their debt is in the form of “vanilla” long term bonds. Very little comes from a revolving credit facility or other short term bank financing.
To the best of my knowledge, there is no such thing as a call provision exercisable by a bond holder. This would seem to defeat the entire purpose of issuing a bond from the issuer’s perspective in the first place; namely, access to capital for a finite amount of time in exchange for a fixed interest payment. Some bonds are certainly callable by the original issuer, at a premium to market price, but I struggle to think of a single publicly traded bond that gives the kinds of debt covenant style call provisions that you’re referring to.
They could try to buy it up, and they might succeed, but they can't call in the debt willy-nilly before it matures.