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Wall Street banks have sold $3 billion worth of loans in support of Elon Musk’s Twitter acquisition, offloading another huge portion of debt transactions remaining on the balance sheet for more than two years I’m doing it.
It will be disposed of more a week after a banker led by Morgan Stanley successfully sold the $5.5 billion debt linked to the acquisition.
The sale orders overturned $5 billion this week, boosting the bank’s confidence that it could eliminate the discounts it originally offered in debt. Morgan Stanley was now aiming to price a protected loan. The loan aimed to pay a fixed interest rate of 9.5% without a discount, according to people who are being described on the issue.
The sale is another coup for the seven lenders who spent about $13 billion to fund Musk’s $44 billion acquisition, including Bank of America, Barclays, Mizuho, Moof and Société. Includes Generale and BNP Paribas.
Wall Street lenders competed hard in 2022 and won a role in the hostile takeover of Twitter, now known as the X.
But market conflicts, including the Federal Reserve decision to aggressively raise interest rates and Musk’s own attempt to back off the deal, have warned lenders.
When the transaction was closed, Morgan Stanley and six other banks were forced to provide capital, hindering their ability to undertake other loans, causing painful losses when writing down the value of the loan. Ta.
But Musk’s close ties with the president last year with Donald Trump’s election have changed the flow of banks. Investor interest in debt has recovered and is further strengthened by a stake in X’s Musk’s artificial intelligence startup Xai.
This month’s revenue and the $1 billion liabilities that lenders sold in January to hedge funds, including Diameter Capital Partners, cleared most of the liabilities the banks lend to fund the transaction. They hold a junior unsecured bridge loan of around $3 billion, people added.
Previously sold $6.5 billion term loans have recovered since trading began, and Wall Street brokers often cite debt at prices between 99 and 100 cents in dollars. This week, when we looked into pricing for secured loans, a group of seven lenders was encouraged.
Morgan Stanley declined to comment, and X did not respond to requests for comment.
