- Musk told banks no losses on risky Twitter debt.
- $13B loan poses risks for banks as advertisers exit Twitter.
- Musk’s vow may not hold, and banks could lose.
Bold No-Loss Guarantee
Despite expectations that banks could lose billions on the debt that financed Elon Musk’s Twitter deal, the billionaire has privately told some lenders they will not lose money, reported the Financial Times this week.
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Banks Face Risky Situation
Seven banks, including Morgan Stanley and Bank of America, provided a risky $13 billion loan last October to support Musk’s $44 billion Twitter buyout.
But with Twitter still negative cash flow after the purchase, banks reportedly already face losses of at least $2 billion on that debt.
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Uncertain Path Ahead
According to sources, Musk has boldly declared the banks will avoid losses. The assurances come while advertisers flee amid controversial tweets.
Still, banks hoped the relationship with Musk would prove valuable. It remains unclear if his guarantees will hold, as some expect banks may be stuck with discounted debt.
