Ars Technica reports that five sources told it that Elon Musk privately assured some of the investors who gave him $13 billion for the dumpster fire formerly known as Twitter that they wouldn’t lose money. Oops.
From Ars:
Despite the assurances, the seven banks that lent money to the billionaire for his buyout—Morgan Stanley, Bank of America, Barclays, MUFG, BNP Paribas, Mizuho and Société Générale—are facing serious losses on the debt if and when they eventually sell it.
…
One multibillion-dollar firm that specializes in distressed debt called X’s debt “uninvestable.”
Selling the $12.5 billion of bonds and loans below 60 cents on the dollar—a price many investors believe the banks would be lucky to accomplish in the current market—would imply losses before accounting for X’s interest payments of $4 billion or more, writedowns that have not yet been publicly reported by the syndicate of lenders, according to FT calculations. The debt is split between $6.5 billion of term loans, as well as $6 billion of senior and junior bonds and a $500 million revolver.
Ars Technica reached out to Musk and X for comment but didn’t procure a reply.
