• Seven banks loaned Elon Musk $13 billion to help the blockbuster buyout of Twitter final 12 months.
• Now, Musk is beneath strain to guarantee lenders there will not be losses to their funding.
• Banks are already anticipated to lose not less than $2 billion in the event that they have been to promote the debt, WSJ reported.

Elon Musk has been telling some bankers who supported his blockbuster buyout of Twitter final 12 months with a $13 billion mortgage that they won’t lose cash on the deal, 5 individuals accustomed to the state of affairs instructed The Monetary Instances.

That is a daring promise contemplating banks are already set to lose about $2 billion in the event that they offload the debt proper now, The Wall Road Journal reported in October.

To fund a $44 billion buy of Twitter final 12 months, Musk sought varied sources of loans, together with $13 billion from seven banks: Financial institution of America, Barclays, BNP Paribas, Mizuho, Morgan Stanley, and Société Générale.

The acquisition itself was a dangerous guess. Twitter was a unfavorable cash-flow enterprise, and when Musk determined to comply with by with the deal final October, lenders already anticipated to face losses of their funding. They, in fact, knew that threat.

“The actual worth is the connection with Elon Musk,” Angelo Zino, a senior business analyst at CFRA, instructed Enterprise Insider final 12 months.

However 9 months after the acquisition, Musk stated that Twitter, now X, is “nonetheless unfavorable money movement,” partly on account of a roughly 50% drop in promoting income.

Advertisers on the platform, together with IBM, Apple, Walmart, and Disney, jumped ship after a latest antisemitic remark by Musk on the platform, which the billionaire later conceded in an interview on the New York Instances’ DealBook summit was “actually the worst and dumbest submit that I’ve ever accomplished” — after telling advertisers who left the platform to “go fuck your self.”

It is unclear when Musk made guarantees to bankers that they would not lose cash on the deal, the Monetary Instances reported. In line with the report, one individual concerned within the Twitter buy stated that the banks could also be unable to dump their debt in 2024, which means they will should hold the debt on their stability sheets at a steep low cost.

Musk and a spokesperson for X didn’t instantly reply to a request for remark despatched exterior working hours.