Banks plan to keep $12.7bn of Twitter debt on their books through early 2023
Lenders admit they won't be able to generate demand until Elon Musk reveals a detailed strategy
According to three sources, banks that loaned $12.7bn to Elon Musk to finance his $44bn Twitter acquisition are planning to keep the debt until next year.
They wait for Musk to reveal a more clear business plan they can sell to investors.
The group of lenders led by Morgan Stanley and Bank of America, including Barclays, has admitted that they will continue to hold the debt for several months, if not a sudden rally in credit markets.
As they try to assess the demand for the debt, the banks have held brief discussions with large credit investors in recent weeks to determine the discount they will need to sell it off.
Some investors stated that they received the impression that the deal would not be quickly brought to market after the informal conversations.
The seven lenders believe it will be easier for creditors to accept Musk's clear strategy for Twitter.
This includes the amount of cost reductions and estimates for the company’s financial performance in 2023-2024.
The $12.7bn debt has been tentatively divided between $6.7bn secured loans and $3bn each of secured or unsecured debt.
These obligations are expected to eventually be financed with fixed-rate bonds.
Banks have more than $35 billion in debt due to takeovers they were unable to sell to investors, resulting in a sharp decline in credit markets.
Musk's $44bn purchase of Twitter ended on Thursday. The banks had to pay $12.7bn -- $200m more than they agreed to lend in April -- to close the deal.
Share With Your Friends And Family Fast, Geab It !!!!