Banks that financed Musk's Twitter acquisition consider selling debt

Banks that provided debt financing for Elon Musk's acquisition of Twitter in October last year are considering selling these debts as soon as September's Labor Day in the United States.

The report said that the banks will consider selling the debt after Twitter's financial situation improves. After Musk's acquisition, many advertisers left the Twitter platform, while the overall digital advertising market also declined. Therefore, even though Musk tried to improve Twitter's financial situation through large-scale layoffs, Twitter's business was still severely affected.

In addition, several large investors have also said that they are not likely to invest in Twitter's debt until next year at the earliest.

In many large acquisitions, banks provide leveraged debt financing and then sell that debt, as in the acquisitions of Citrix Systems and Nielsen. Therefore, it is not in line with usual practice for banks to still hold the debt in the Twitter acquisition.

The banks that provided debt financing for the Twitter acquisition include Morgan Stanley, Bank of America, and Barclays. The total amount of debt financing was $13 billion.

The decision by the banks to consider selling the debt is a sign that they are concerned about the financial health of Twitter. The company's advertising revenue has been declining, and it is unclear how Musk will be able to turn things around.

If the banks are unable to sell the debt, they could face significant losses. This could have a ripple effect on the financial markets, as it would raise concerns about the health of the leveraged lending market.