According to a report this week, several major US and foreign banks would suffer losses of $500 million or more if they carried out their commitments to finance Elon Musk’s $44 billion acquisition of Twitter.
The banks agreed six months ago to raise $13 billion in debt to finance Musk’s purchase; however this arrangement is not contingent on the banks’ ability to sell the debt to investors.
As calculated by Bloomberg and reported on Saturday, the banks’ losses would total “to $500m or more if the debt were to be sold now”.
Unsecured, high interest bonds make up about $400 million of the projected $500 million in losses for the banks related to the Twitter debt;
As reported by Bloomberg, these losses do not include fees the banks would ordinarily make on the transaction.
