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Elon Musk, SolarCity execs to buy most of SolarCity bond offering

SolarCity Corp. uses debt to finance its business of offering solar-power systems to residential homeowners with little to no money down.

As SolarCity Corp. prepares to be acquired by Tesla Motors Inc., the leaders of those two companies are putting millions of dollars toward the solar installer’s latest round of debt.

In a filing Tuesday afternoon, SolarCity SCTY, +0.30% said that Tesla TSLA, +0.86% chief executive (and SolarCity chairman) Elon Musk has agreed to buy more than half its latest offering of bonds, putting $65 million toward the $124 million SolarCity hoped to raise. SolarCity cofounders and top executives Lyndon Rive and Peter Rive, Musk’s cousins, agreed to buy $17.5 million in bonds apiece, a total of $100 million for the three executives.

SolarCity’s business depends on debt — the company offers homeowners the...