Wall Street banks lined up to support Elon Musk's plan to buy Twitter, and some international banks followed suit.
More than a dozen banks around the world have provided various forms of debt support, totaling $25.5 billion, according to regulatory filings on Thursday. As Musk's adviser, Morgan Stanley is the best: about $5.5 billion.
Over the past week, investment bankers have scrambled to get involved in what could be the biggest privatisation deal in history. Although Mr Musk has always been unusual and there has been no sign of his plan to privatise Tesla, Inc. in 2018, banks are clearly prepared to bet on Mr Musk, hoping that the deal will allow them to make a lot of money. With the exception of Goldman Sachs Group and JPMorgan Chase & Co, they are Twitter consultants.
Another absent figure is Wells Fargo & Co.
Loans
The banks' support included a $13 billion debt financing commitment, about 90 per cent of which came from Morgan Stanley, Bank of America Corporation, Barclays and Mitsubishi UFJ.
The rest comes from three other banks-BNP Paribas, Mizuho and Societe Generale. This includes a $6.5 billion preferred secured term loan and a $500m preferred secured revolving loan.
There is also a preferred secured bridge loan of no more than $3 billion and an unsecured bridge loan of no more than $3 billion-both of which may take the form of bonds.
These banks will not wait forever. Mr Musk has about 75 days to execute the deal: unless the debt financing commitment is extended, the $13 billion commitment will expire if a takeover agreement is not implemented by July 4, according to the documents.
Musk also received letters of commitment for margin loans totaling US $12.5 billion from Morgan Stanley, Bank of America Corporation, Barclays, Mitsubishi UFJ, Credit Suisse, BNP Paribas, Citigroup Inc, Deutsche Bank, Mizuho, Royal Bank of Canada, Societe Generale and Imperial Commercial Bank of Canada. The loan includes a condition that Musk meets a maximum loan-to-value ratio of 20%. It is expected to be met by Musk's contribution to Tesla, Inc. 's shares.
The margin loan commitment letter is valid until 23:59 New York time on May 4th.
In addition to the debt plan, Mr Musk has pledged $21 billion in equity financing for potential deals. He may not have to pay out of his own pocket. It is reported that Musk and his advisers will select potential partners in the next few days.
Edit / somer