Elon Musk‘s antics have made life tough for banks that are helping finance his takeover of Twitter, the media reported
According to a report in the Wall Street Journal citing sources, Morgan Stanley, Bank of America and Barclays are finding it hard to hold all $13 billion of debt backing the deal rather than sell it
Banks would likely face losses of around $500 million or more if they tried to sell Twitter’s debt at current market prices
A bank generally sells the debt used to create a buyout, and moves on to the next deal
Musk and Twitter have time till October 28 to close the $44 billion takeover deal
Banks signed an agreement in April to provide Musk with the debt financing he needed to buy the company
“They had originally intended to find third-party investors, such as loan asset managers and mutual funds, who would ultimately lend the money as is customary in leveraged buyouts,” said the report
However, rising interest rates and growing concerns about a recession have “cooled investors’ appetite for risky loans and bonds”