Musk assured bankers on Twitter buy
The debt is split between $6.5 bn of term loans, as well as $6 bn of senior and junior bonds and a $500 mn revolver.
SAN FRANCISCO: Tesla and SpaceX CEO Elon Musk reportedly told bankers after taking $13 bn in loan to fund his Twitter deal last year that they will not lose any money on the acquisition.
Despite his assurances, a media report said seven banks that lent money to Musk — Morgan Stanley, Bank of America, Barclays, MUFG, BNP Paribas, Mizuho and Societe Generale — “are facing serious losses on the debt if and when they eventually sell it”. The verbal guarantees by Musk “fell sharply after he completed the acquisition last year”. “The banks have held the debt on their balance sheets instead of selling at a steep loss in the hope that X’s performance will improve following a series of cost-cutting measures.”
The debt is split between $6.5 bn of term loans, as well as $6 bn of senior and junior bonds and a $500 mn revolver. There was no guarantee the banks would be able to offload the debt even in 2024. Lenders are unlikely to get even 60 cents on the dollar for the bonds and loans.
