Twitter debt: New Trump Trade

One thing is that UnitedHealth Group raised concerns with top US securities regulators in a social media post by activist investor Bill Ackman who argued that the healthcare group was inflated its profits.

Today’s newsletter:

Wall Street takes down Muschia’s headache

Coffee and donuts fuel insurance play

A wild bar guy after the brake

Bank ends Twitter nightmare

Morgan Stanley may need to thank Donald Trump, his ability to clear some of the biggest hang loans stuck on his balance sheet.

The bank sold most of its nearly $13 billion in debt on Wednesday, and six other lenders were forced to fund Elon Musk’s $44 billion acquisition of Twitter in 2022.

The funding package went south almost immediately between Russia’s full-scale invasion of Ukraine, the federal reserve race that raises interest rates, and the lawsuit to retreat the deal from Musk’s own lawsuit.

The hedge fund provided just 60 cents in 2023 dollars for its advanced loans.

But Trump’s election changed all that. On Wednesday, Morgan Stanley sold $5.5 billion in Twitter (now X). That followed the sale of a $1 billion loan last month.

The deal was all purchased by Citadel, Apollo Global Management, PIMCO and Diameter Capital, attracting some of the biggest credit investors.

And while many have been warmed by the ability to cut the company’s costs and the valuable stock he owns in his artificial intelligence venture XAI, Trump has in the hearts of all investors. It was expensive.

One money manager who handed over the contract said it was a good time for the bank to sell, saying, “Elon’s Cachet. He’s FOP, a friend of the president.”

Probably the best endings that Morgan Stanley, Bank of America, Barclays, MUFG, BNP Paribas, Mizuho and Sociéte Generare can expect.

“I don’t want to sugar coat it. The bank didn’t want to be in this position,” said one person involved in the transaction.

These banks have held the debt itself for the past two years. This is partly concerning masks that guarantee masks won’t lose money, people familiar with the issue said.

Now they say that the decision to support SpaceX and Tesla’s billionaire chief executives could lead to future favourable pay by acquiring banking agenda for his other businesses. I’m hoping for that.

Seven lenders still sell $6 billion in Twitter debt (a much more dangerous loan than previously offloaded debt). And Morgan Stanley hopes Musk’s relationship with Trump endures.

Pensions, donuts, cheap perfumes

Jab Holding, Pret a Manger and Coty, one of Europe’s outstanding trading conglomerates and owner of Krispy Kreme, is adding insurance to its portfolio.

The conglomerate, managed by the intensively private billionaires, Leyman family, told FT in an interview last year that it would restructure its portfolio to build around financial services businesses such as insurance.

On Wednesday, he announced his first major steps, buying a Virginia-based prosperous life from Elliott Management for just $3 billion, said those familiar with the matter.

The shift to insurance began last year with an executive overhaul. JAB has hired a flashy job when tapping US-based veteran Anant Bhalla as chief investment officer.

It is often by DD that alternative asset managers are pushing to the insurance sector to take advantage of deeper, more permanent capital wells that can become steady and complicated over decades, like Berkshire Hathaway. It is recorded.

But the jab is an amazing home. They have enough capital and have yet to send out hamster wheels of loans that they have to be diversified, like Apollo Global Management.

The conglomerate traces its origins to the chemical business of Mittel Stand, which owns stock in Reckitt Benckiser and Coty, has been global since 2012 after establishing a holding company to chase a deal led by former Mars executive Olivier Goudette. It gave me a sense of a transaction.

Tens of millions of dollars have been consolidated with the coffee-straddled industry into quick service restaurants, perfumes and veterinary services.

But that didn’t work exactly. In 2023, Goudet was replaced by a sudden leadership reform before the group began promoting financial services.

So, how does insurance fit with JAB?

Those familiar with the business shift said that insurance acquisitions are essentially a “hedge of the natural market.” If interest rates are high and consumer companies are struggling, the insurance business will hopefully balance the financial balance of the entire group.

This has not always worked well for conglomerates.

General Electric is an insurance giant through the GE Capital Division and under longtime chief Jack Welch, whenever there was a shortage of other units that spanned the JET engine and dishwasher to the MRI machine. This unit has helped you make a profit.

However, GE lost billions of dollars on long-term care insurance policies, hampering cash flow after not predicting an increase in lifespan.

In the Ozempic era, the donut sales and insurance premium tables can hold a surprising correlation.

The biggest battle in Japan

It has not long since Marelli, a Japanese-based automotive parts supplier, has experienced a major debt restructuring that casts a shadow over domestic private equity.

It was 2022.

Since then, struggling debt investors’ strategic value partners and fortress investment groups have acquired some of their debts, and they are now nervous with the company that can now push it into another restructuring. Masu.

Marelli needs the funds to meet what it calls a “temporary working capital gap.”

The consortium, which includes the SVP and the fortress, proposes to provide funding, but only if the new loan and the old loans made by participants become senior to other debts.

Such so-called upstrata could become increasingly common in the US and Europe, but can be considered aggressive in Japan.

These types of legal brawls have been growing in the US public debt market in recent years.

These tormented debt store investors are not afraid to flush out credit contracts and pull punches due to potential loopholes. (DD’s Sujeet Indap spilled enough ink for this theme.)

Over the past few months, Japan has been hostile in acquiring approaches (Seven and & of Seven and of Seven and Tard), Mega Margar (Honda and Nissan), and private equity brawls (Fuji) We proposed soft KKR and Bain Capital.

The country has been open to a more American model of financial capitalism in recent years, accompanied by shareholder-friendly reforms, which may be a particularly tough test.

However, for Japan, it is also a sign of the times.

Job movements

ARES Management promoted Kipp Deveer and Blair Jacobson to co-chairman, CEO Michael Arougheti, to expand the top rankings of private investment companies.

The White House has appointed Ben Black, the son of former Apollo CEO Leon Black, to head of the International Development Finance Corporation.

Latham & Watkins hired Jerome McCluskey to the company’s bank and private equity finance practices. He was previously a general counsel at Charles Bank Capital Partners.

Smart lead

Analysts at Tariff Trubles Wall Street have bombed executives of listed companies with questions about how to deal with the trade war, the FT reports.

Bloomberg writes that it is struggling to maintain that it is behind Bond’s giant Pimco as its rivals have ploughed all the steam into a private market gold rush.

Sovereign wealth funds Alphaville’s Trump appears to be taking their first concrete steps towards the US sovereign wealth fund, and friends at FT Alphaville are digging into how it works.

News Round Up

Nissan’s board rejects a $58 billion merger with Honda (FT)

Backed by KKR, Cotiviti approaches trading for rival healthcare data group Edifecs (FT)

World’s largest offshore wind developer Ørsted cuts investment to 25% (FT)

After a failed legal challenge, Lloyds hit with a £1 billion tax bill (FT)

British Airways Backtrack (FT) for overhauling Frequent Flyer Club Benefits

Starme hopes the controversial oil and gas fields of the North Sea move forward (FT)

EU probes consumer protection (FT)

US Postal Service Backtrack (FT) on suspension of packages from China

Santander announces 10 billion euro buyback in record profit (FT)