Home Business Elon Musk is looking to replace his high-interest debt

Elon Musk is looking to replace his high-interest debt

Banks are considering offering Elon Musk new loans, backed by his Tesla shares, to replace part of the $13 billion in high-interest debt he took on to fund the Twitter deal, sources told Reuters.

And the banks, led by Morgan Stanley, were forced to back-fund the package of loans granted to finance the Twitter deal with their own money after deteriorating credit markets and the turbulent start to the Twitter Musk era, which made it difficult to collect debt debt from institutional investors.

Discussions thus far have focused on how to replace the $3 billion in unsecured debt on which Twitter is paying an 11.75% interest rate.

The company is estimated to face annual interest costs of about $1.2 billion if the current debt structure continues, which is more than Twitter’s earnings for all of 2021.

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