Tesla and Morgan Stanley did not immediately respond to a Reuters request for comment.
Billionaire Elon Musk’s bankers are considering providing the Chief Executive Officer of Tesla Inc with new margin loans backed by the US automaker’s stock to replace some of the high-yield debt on his Twitter deal, Bloomberg News reported Wednesday.
The margin loans are one of several options that the Morgan Stanley-led banking group and Musk’s advisers have discussed to reduce the $13 billion debt that Twitter took on as part of Musk’s $44 billion deal, it said. report, citing people with expertise.
Discussions so far have centered around replacing the $3 billion in unsecured debt on which Twitter pays interest at 11.75%, the maximum banks agreed to fund the acquisition in April, the report said.
Morgan Stanley, Bank of America Corp, Barclays Plc and Mitsubishi UFJ Financial Group Inc led the $13 billion funding for Musk’s offer.
Tesla and Morgan Stanley did not immediately respond to a Reuters request for comment.
Banks are not expected to service any of Twitter’s debt to institutional investors until the new year, Bloomberg reported.
Reuters reported in October that banks had abandoned plans to sell the debt to investors amid uncertainty about Twitter’s fortunes and losses.
Musk closed the deal with $13 billion in loans from banks and a commitment of $33.5 billion in equity, including his 9.6% stake in Twitter worth $4 billion and $7.1 billion from investors, including Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal.
(Except for the headline, this story has not been edited by NewsMadura staff and is being published from a syndicated feed.)
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