Tesla will offer $250 million in shares and $750 million in convertible debt, in order to continue its development form a niche player to a high-volume automaker. Its action can go up to $1.15 billion which will be used for strengthening its balance sheet. Tesla said in a statement: “further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3.”

Tesla said CEO Elon Musk will participate in the offering by purchasing $25 million of common stock. Tesla shares rose 2.7 percent in extended trading in New York to $262.55 at 4:46 p.m. Wednesday.A capital raise by Tesla has been anticipated since late last year and gained steam last month after Musk warned the company could be “close to the edge” on cash needs. Some Wall Street analysts had predicted that Tesla would seek to raise as much as $2.5 billion in capital.

The notes in the offering will be convertible into cash and/or shares of Tesla’s common stock

Tesla wrote further in the statement: ’’The interest rate, conversion price and other terms of the notes are to be determined. With respect to the notes, Tesla intends to enter into convertible note hedge transactions and warrant transactions to limit dilution of its common stock. In connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the hedge counterparties or their affiliates expect to enter into various derivative transactions with respect to Tesla’s common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes.

Goldman, Sachs & Co., Deutsche Bank Securities, Citigroup and Morgan Stanley are acting as lead joint book-running managers for the offering, with Barclays, BofA Merrill Lynch and Credit Suisse acting as additional book-running managers. An effective registration statement relating to the securities was filed with the Securities and Exchange Commission on May 18, 2016.