After months of back and forth, the billionaire Elon Musk reportedly finally agreed to fulfill his commitment to buy Twitter at the original price. However, this is not yet certain, and the court has postponed their trial to October 28. Musk already said he is waiting to receive $13 billion from Morgan Stanley and seven other banks to fund the deal. Now, financial experts say the banks that want to fund this deal may lose “$500m or more if the debt were to be sold now.” Morgan Stanley leads the Assembly of funders, and other well-known financial institutions like Barclays and Bank of America are also a part of it. Six months ago, they committed to providing Musk with $13 billion in debt.
Funders should await a hefty loss in case of selling the debt now
Unsecured and high-interest bonds would account for $400m of the $500m loss, and they exclude fees the banks would typically earn on the transaction. The agreement between Musk and banks was made in April, and since then, credit markets have changed due to the higher interest rates and other variables. That’s why banks are now hesitant to finance this deal. Howard Fischer, a Moses Singler law firm partner, said, “I think that those banks would like to get out of it. I think the deal makes less sense for them now, and that the debt will be harder to syndicate to investors.” Musk already agreed to buy Twitter at the original terms, which is $54 per share. He also forgot his initial claims about the number of bots and fake accounts on Twitter. However, he still wanted the right to sue Twitter executives over lying about the number of real users. The billionaire also said the Twitter deal has never been primarily financial for him. “I’m not doing Twitter for the money. It’s not like I’m trying to buy some yacht, and I can’t afford it. I don’t own any boats. But I think it’s important that people have a maximally trusted and inclusive means of exchanging ideas and that it should be as trusted and transparent as possible.” Musk said. Musk and Twitter still have time until October 28 to reach an agreement. The court ruling determines the platform‘s owner if they fail in a mutual agreement.
