Musk has relaunched a deal to buy Twitter Inc. (TWTR), but his ability to borrow for the deal may be as shaky given current market conditions as it was a few months ago.
Musk will need approximately $ 13 billion in debt financing at a time when the secondary market environment for high-yield debt remains extremely difficult.
In a recent Citrix Systems Inc. (CTXS) privatization deal, banks invested $ 4 billion in bonds to back the deal, the Wall Street Journal previously reported. Sold at a 16% discount for a loss of approximately $ 500 million because investors did not show sufficient interest in the initial terms of the deal. The banks sold an additional $ 4.1 billion in leveraged loans related to Citrix Systems’ take-private deal at a 9% discount on face value, for a loss of more than $ 100 million.
As the market continues to experience turmoil, investors may be reluctant to buy Twitter debt unless there is a discount, analysts said.
…
