Foreign media believe that the return of the Twitter acquisition case may make the banks that provided Musk with the acquisition funds face huge losses.

(Schematic diagram, AFP)

[Financial Channel/Comprehensive Report] The world’s richest man, Elon Musk, was exposed to the social platform Twitter and proposed that if the court stops the lawsuit, it will be based on the initial US$54.2 per share (about NT$1711) and the overall 440 The acquisition was completed at a price of US$100 million (about NT$1.3 trillion), and the news aroused outside attention.

However, some foreign media believe that the return of the Twitter acquisition case may cause the banks that provided Musk with the acquisition funds to face huge losses.

According to Reuters, large banks including Morgan Stanley, Bank of America and Barclays had earlier pledged that Musk would provide $12.5 billion (about NT$394.6 billion) to buy Twitter.

According to the data, Twitter’s debt package includes $6.5 billion in leveraged loans, $3 billion in secured bonds, and another $3 billion in unsecured bonds.

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As with any large acquisition, the banks will seek to sell debt to take it off their books, the report said.

However, recent fears of rapid global interest rate hikes, fears of economic recession and market volatility caused by the Ukraine-Russia war have made investors gradually lose interest in riskier debt such as leveraged loans, which has left banks trying to sell debt in leverage. Significant losses in financing.

At this point, Musk turned around and bought Twitter, which could not have been worse for the aforementioned bank that provided Musk with the acquisition funds.

Some analysts said that from the bank's point of view, funding Musk's acquisition of Twitter at this time is not ideal, but the banks have no choice but to fund the deal.

Some leveraged finance sources estimate that under such market conditions, the potential losses for banks involved in Twitter's debt could reach hundreds of millions of dollars.

Twitter declined to comment on the report, and Musk did not respond to a request for comment.

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