Banks prepare to hold $12.7bn Twitter debt on books until early 2023

[brooklynite]

Source: Financial Times

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 seven lenders are wagering it will be easier to appeal to creditors after Musk presents a clear strategy for Twitter, including the size of cost cuts and estimates for the company’s financial performance in 2023 and 2024.

Read more: https://www.ft.com/content/d1879d0c-c52e-4f48-82f0-09458add4aee

[SoCalDavidS]

1. Then They'll Pass Their Losses Onto Consumers nt

[cstanleytech]

17. While also taking advantage of any potential writeoff on their corporate taxes.

[VMA131Marine]

2. Must be nice to be able to get banks to loan you billions of dollars

even when they know they are going to lose money on the loans. Isn’t this a breach of fiduciary responsibility to the banks’ shareholders to loan money knowing you’re going to take a loss?

[bronxiteforever]

5. My god are you right! 12.7 billion loan without a business plan!

Fiduciary duty is out the window. I don’t really know how this happened.

[exboyfil]

10. And will any financial media ask these questions of the bankers?

Of course they won't.

[NullTuples]

3. Who are the other three, and did they all really loan $12.7 bn w/o a plan?

"and will probably end up incurring huge losses on the financing package."

So why did they choose to do so?

Something is not adding up here...unless the purpose has more to do with politics.

As in, a long term investment in the 2024 elections that is expected to make $12.7 bn look like a payday loan.

[OAITW r.2.0]

4. Whose money got loaned? Investors or cash assets of the financial companies?

Did these companies get individual investors to pony up? If so, we'll see how how this turns out. I thought Elon used his own $ to buy Twitter, but it looks like he got some other suckers to jump in as well.

[smb]

6. Business Plan

1. Remove all safeguards and allow Twitter to degenerate into a 4chan-type open sewer.
2. Raise $12,700,000,000 from the remaining advertisers: half from the makers of Truck Nutz and half from the MyPillow guy.
3. Profit!

[LetMyPeopleVote]

7. This deal never made financial sense and I was surprised that Musk got financing

[Obvious85]

8. Remember Murdoch's loss when he bought Myspace in 2009 for $580 million. It failed miserably.

Musk made a big mistake

[LeftInTX]

9. Murdoch bought My Space in 2005. My Space continued to grow until 2009

In 2011, Justin Timberlake purchased My Space for $35 million.
I don't believe the platform was competitive enough to compete with facebook. It would have needed lots of changes.
So, it doesn't like an acquisition, but obsolescence killed My Space.

[Miguelito Loveless]

11. Awfully stupid of them to lend

money on such a shakey venture.

[Joinfortmill]

12. What stupid fucks

[Bayard]

13. Why does Musk need to borrow money?

I thought Richest Man In The World could just pay cash.

[Hassin Bin Sober]

14. He borrowed (margin loan) a bunch more against his Tesla stock for his portion

That’s on top of a bunch of margin loans he already has against the Tesla stock.

He sold a bunch of Tesla as well.

[jmowreader]

15. There's one SLIGHT problem with this plan

Elon Musk's business plan for Twitter looks a hell of a lot like the Underpants Gnomes' business plan.

Phase 1: Take over Twitter.
Phase 2: ???
Phase 3: Profit!

Advice for Morgan Stanley, Bank of America and Barclays: Crack is not a good hobby for you, and you MUST have smoked about an ounce of that shit in one sitting before you agreed to back Elon Musk in buying a company that's been in existence 16 years and still hasn't turned a profit.

[ashredux]

16. I'm no financial wizard, but normally you have a business plan before you get the loans

This decision by the banks had to be made at the top level…

Makes one go, Hmmmm 🤔

[twodogsbarking]

18. Where I grew up they called people like these bankers "dumb fucks".