Elon Musk is on course to own Twitter. Chesnot/Getty Images

  • Elon Musk’s revival of the $44 billion buyout of Twitter comes as demand for risky debt is sinking. 
  • That means major banks financing the deal could face big losses, Reuters reported. 
  • Rising interest rates and recession fears are making investors worried about taking on debt loads. 

Elon Musk’s turnaround on the $44 billion buyout of Twitter is taking place at a time of reduced investor appetite for riskier debt – leaving major banks lined up to finance the deal potentially facing sharp losses, Reuters reported Wednesday. 

Musk will put up much of the takeover tab by selling down his stake in Tesla, the electric vehicle maker he runs,  while major banks have committed to $12.5 billion in financing. 

Reuters reported that more than 10 bankers and industry analysts, pointing to recent high-profile losses in leveraged financing, said the outlook was poor for the banks looking to sell the debt to get it off their books. Investors are concerned about riskier debt as interest rates spike, recession fears have grown and markets are volatile in the wake of Russia’s invasion of Ukraine. 

Morgan Stanley, Bank of America, and Barclays have committed to financing the Twitter deal, and BNP Paribas, Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Societe Generale are also part of the syndicate, Reuters reported. 

The Twitter debt package is made up of $6.5 billion in leveraged loans, $3 billion in secured bonds, and $3 billion in unsecured bonds. 

Reuters said leveraged financing sources have previously said potential losses could amount to hundreds of millions of dollars for Wall Street banks involved in the Twitter debt as they try to sell it to investors. 

On Tuesday, Musk’s lawyers sent a letter to Twitter offering again to acquire the social media company for $44 billion, or $54.2o per share, making the move after months of legal wrangling as the billionaire attempted to back out of the deal. The parties were set to meet in court on October 17. Twitter said it plans to close the deal at the $44 billion price tag, the bid matching Musk’s offer made in April. 

Twitter stock was down 0.6% at $51.68 during Wednesday’s session, below Musk’s bid of $54.20 a share. 

Read the original article on Business Insider

TECH NEWS RELATED

Vitesco Technologies at the CTI: Increasing efficiency as a driver of success for electromobility

In Berlin, the company presents technologies for more range and higher integration in electric cars

View more: Vitesco Technologies at the CTI: Increasing efficiency as a driver of success for electromobility

VinFast opens its first two stores in Cologne and Paris

VinFast has officially opened its first two VinFast Stores in Cologne, Germany and Paris, France

View more: VinFast opens its first two stores in Cologne and Paris

Borgward reportedly bankrupt, again

Historic German automotive brand Borgward is reportedly bankrupt again, almost eight years after its revival was announced to the public. Automotive News (subscription required), citing a statement from Foton, the modern Borgward’s Chinese backer, reported last week a Beijing court in November had declared Borgward bankrupt. Borgward is now ...

View more: Borgward reportedly bankrupt, again

Latifi: 2022 my worst season in F1

Nicholas Latifi has conceded that his 2022 Formula 1 campaign was the worst of his three in the sport. Following the season-ending Abu Dhabi Grand Prix last month, Latifi parted ways with Williams, bringing an end to his stint with the Grove-based squad. Latifi joined Williams in 2020, and ...

View more: Latifi: 2022 my worst season in F1

Lexus in development of a manual transmission for electric cars

Sounds like an oxymoron doesn’t it? But this is more ‘virtual combustion powertrain’ than just a fake gear stick…

View more: Lexus in development of a manual transmission for electric cars

Supercars: Feeney, Doohan brought full circle by Adelaide win

Photo / Supplied Broc Feeney’s childhood friend Jack Doohan (see below pic of Feeney and Doohan in 2014) proved a lucky charm for the first-time Supercars winner in Adelaide. Feeney took out the VALO Adelaide 500 on Sunday after outlasting Chaz Mostert. It was rookie Feeney’s first Supercars race ...

View more: Supercars: Feeney, Doohan brought full circle by Adelaide win

Tata Car Discounts Dec 2022 – Tiago, Tigor, Harrier, Nexon, Altroz

Through the month of December, Tata Motors is offering discounts upto Rs 65,000 across range except on the Punch micro-SUV Image by – Yuva Raj Tata Motors, having reported sales increase to the extent of 54.60 percent through the month of November 2022, is extending its discount scheme into December. ...

View more: Tata Car Discounts Dec 2022 – Tiago, Tigor, Harrier, Nexon, Altroz

Indonesia's investment minister is confident that Tesla will be injecting money into the country

As the global electric vehicle (EV) market begins to rise, the industry is looking to invest more in countries that produce the resources needed to build battery components and other materials. Indonesia is one of those nations and it is trying to attract foreign investors especially those from the ...

View more: Indonesia's investment minister is confident that Tesla will be injecting money into the country

Sacrilegious? There's now a FWD Subaru Crosstrek (XV) in Japan, price equals to RM 86k

BMW Group partners with THACO to start local production in Chu Lai, Quang Nam Province, Vietnam

New Lancia Ypsilon Rendered As Crossover With Radical Design

Everything that you need to know about the MINI Cooper SE

Got back to motorcycling after a decade: Brought home a Honda CB350

Used car prices in South Africa climb 14th quarter in a row

Ford To Supply Over 2,000 E-Transit Vans To Deutsche Post DHL Group

Porsche unveils new 911 Dakar off-road sports car

Top 3 safety features on the new Chery Tiggo 7 Pro

BMW M Boss Says There Is Room In The Lineup For An M4 CS

Interview with Mobilize CEO Clotilde Delbos: “The car becomes a revenue platform”

Sime Darby Auto ConneXion breaks ground for new Penang Ford 3S Centre

OTHER TECH NEWS

Top Car News Car News