Banks prepare to hold $12.7bn Twitter debt on books until early 2023
Banks that lent $12.7bn to Elon Musk for his $44bn Twitter takeover are preparing to hold the debt until early next year as they wait for the billionaire to unveil a clearer business plan they can market to investors, according to three people with knowledge of the plans.
Barring an unexpected rally in credit markets this year, the group of lenders, led by Morgan Stanley, Bank of America and Barclays, have conceded they will be stuck holding the debt on their books for months or even longer and will probably end up incurring huge losses on the financing package.
The banks have in recent weeks held short discussions with several large credit investors as they attempt to gauge the demand for the debt and the discounts they will ultimately need to offer to offload it. The conversations have been informal and some investors said they were given the impression the deal would not come to market quickly.
The group of banks, which also includes MUFG, BNP Paribas, Mizuho and Société Générale, did not attempt to sell the debt to institutional investors before the deal closed, as is customary, given legal wrangling between Musk and Twitter. They are now contending with one of the largest “hung” financings ever.
Musk has taken the helm of the company after firing chief executive Parag Agrawal and ordered staff to work around the clock to explore implementing monthly fees for verified Twitter accounts.
This story originally appeared on: Financial Times - Author:Ortenca Aliaj
