United States: Several major US and foreign banks will lose $500 million or more if they meet their commitments to finance Elon Musk's $44 billion acquisition of Twitter, according to a report on Saturday.

The banks agreed six months ago to raise $13 billion in loans to finance Musk's purchase; The agreement is not dependent on the ability of banks to sell loans to investors. Banks led by Morgan Stanley and six others, including Barclays and Bank of America, made this commitment.

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If the loan were to be sold now, the banks' losses would total "$500m or more", according to calculations made by Bloomberg and released on Saturday.

Credit markets have deteriorated as a result of increased returns on riskier junk bonds and leveraged loans, as a result of high interest rates coupled with efforts to beat record inflation. When the Musk-Twitter deal was financed in April, banks agreed to lower-than-market return terms, potentially resulting in a write-down.

Unsecured, high-interest bonds cause banks to lose about $400 million of an estimated $500 million in losses related to Twitter loans; These losses do not include the fees that banks usually charge on transactions.

Howard Fischer, a partner at Moses Singler law firm, told the outlet: "I think those banks will want to get out of it, I think the deal makes less sense to them now, and I think it's harder to syndicate the debt." Will be the investor."

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Musk abruptly ended his three-month effort to terminate the Twitter settlement through a US court in Delaware last week, citing the prevalence of fake accounts on the social media platform. By some estimates, 20% of Twitter users are fake.

The billionaire CEOs of Tesla and SpaceX also abandoned efforts to reduce the deal's $44 billion price tag to $10 billion (Twitter shares traded as low as $20, down from the $54 per share agreed in April). , declaring that he will accept the original terms. compromise. On Saturday, Musk claimed in an interview with the Financial Times that his interest in the business has never been primarily financial.

"I don't use Twitter for financial gain. It's not like I'm attempting to buy a yacht and am unable to do so. No boat is mine. However, I believe it's important." that people have a highly credible and open way to exchange ideas, and it should be as transparent and credible as possible. However, Twitter did not immediately drop legal action to compel Musk to submit .

Musk's lawyers said in a filing that "there is no need for an accelerated trial to order the defendants to do what they are already doing." “However, Twitter will not accept yes as a response. Unsurprisingly, they have insisted on moving forward with the lawsuit, jeopardizing the deal and jeopardizing the interests of its shareholders. Twitter’s The attempt to prevent the trial is "an invitation to further mischief and delay," according to

Musk requested a delay in the trial, which was granted Thursday by the case's judge, Kathleen McCormick. The trial was originally scheduled for October 17. According to Musk's lawyer, the transaction could be completed by October 28, "pending receipt of the proceeds of the debt financing."

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Some caution, however, is that, despite incurring significant losses, there are not many legal or reputable ways for banks to avoid providing financing. According to Fisher, if they relied on bank financing and this financing was not absolutely certain, it would be difficult for deals to proceed. However, McCormick has said it will schedule the trial for November if the deal doesn't close at the end of this month.