The CEO of Bank of America, one of the financiers of Elon Musk‘s Twitter takeover, doesn’t appear worried about the deal.
CNBC reported on Thursday that Musk is now in charge of Twitter. Binance, one of the investors in the deal, told CNBC the acquisition has closed.
After Musk first announced plans to buy Twitter in April, he secured equity financing from an array of investors, including technology firms, as well as debt financing from a number of investment banks. One of those was Bank of America.
But with the rout in technology stocks this year and investors cautious on risky assets, that debt could be hard to sell on to investors, meaning the banks may have to hold onto the debt.
The Wall Street Journal reported Wednesday that the investment banks may hold onto the debt until next year before selling it. Credit analytics firm 9fin estimates the banks could face losses of $500 million if they sold the debt in the current environment.
In an interview with CNBC on Friday, Bank of America CEO Brian Moynihan, seemed unfazed however.
When asked if he would lose sleep over the deal, he said: “I’ve got experts that handle the clients and I don’t lose sleep on them. I lose sleep for a lot of other things, but not for that.”
The banks that pledged to finance the deal have started releasing the funds into an escrow account, according to the Wall Street Journal. When the acquisition closes, the funds will be handed to Musk to finance the deal.
There has been no official confirmation that the deal has been completed yet, but Musk alluded to it being closed in tweet which said: “the bird is freed,” referring to Twitter blue bird logo.
Source: https://www.cnbc.com/2022/10/28/musk-twitter-deal-bank-of-america-ceo-isnt-worried-about-debt-funding.html