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