Bond investors rewarded Tesla Motors Inc. by snapping up $2 billion of convertible notes at funding costs that are lower than a five-year average as the luxury electric-car maker prepares to build the world’s largest battery factory.

In an offering that was bigger than initially estimated, the company sold $800 million of 0.25 percent, five-year notes and $1.2 billion of 1.25 percent, seven-year securities, according to data compiled by Bloomberg. Both coupons are lower than the median for similar deals since 2009. A conversion premium of 42.5 percent more than Tesla’s share price before the sale for each portion of debt exceeds the median for comparable transactions.

That shows investors are willing to accept below-market income while waiting for the company’s stock to surge after delivering a more than 300 percent gain in 2013. The shares already exceed the 12-month price target among analysts surveyed by Bloomberg. Proceeds from the sale, which Palo Alto, California-based Tesla initially estimated to be at least $1.6 billion, will help co-founder Elon Musk build a plant with potentially more capacity than any other to make lithium-ion batteries.

Companies from Yahoo! Inc. to Ford Motor Co. have issued about $32 billion of similar convertible notes since the beginning of 2009 with a median coupon of 2 percent and a 30 percent conversion premium, according to Bloomberg data based on dollar-denominated issues of at least $500 million with initial maturities between four and eight years.

In May, Tesla sold $660 million of 1.5 percent convertibles due in 2018 with an initial premium of 35 percent, Bloomberg data show.

Those securities traded at 207.8 cents on the dollar at 10:08 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Tesla shares closed at $252.54 yesterday, exceeding the average analyst price target of $231.30 for the next year, Bloomberg data show. The stock has climbed from less than $35 a year ago. (Bloomberg)