Loans that Elon Musk used to buy Twitter have become the worst merger-finance deal for banks since the financial crisis of 2008-09, according to a report.
Seven banks involved in the deal, including the likes of Bank of America and Morgan Stanley, gave Musk’s holding company about $13 billion to take the social media giant private in 2022. According to The Wall Street Journal, banks who lend cash for takeovers typically try to sell the debt to other investors fast—but that has not happened with the Twitter deal.
The Journal reports that banks haven’t been able to sell the debt without taking huge losses, predominantly because of the company’s poor financial performance. That means the loans have remained “hung,” or stuck, on banks’ balance sheets.
