Elon Musk has secured $46.5 billion of committed financing to back his hostile bid for Twitter Inc., with debt accounting for $13 billion including a potential $6 billion of secured and unsecured bonds.
In an April 20 regulatory filing, Musk disclosed that a group of banks led by Morgan Stanley has committed to providing a $6.5 billion senior secured loan facility, a $500 million senior secured revolver, and up to $3 billion each of senior secured and unsecured bridge financing that is “usually issued as notes.” Additionally, the same creditors will furnish Musk with a $12.5 billion margin loan against some of his Tesla stock.
Existing Twitter bonds have traded lightly and rangebound all month as traders and investors parse each day’s developments since Musk’s April 4 purchase of a 9.2% “passive” stake in Twitter made him the company’s largest investor. The borrower’s 5% senior unsecured notes due 2030 jumped around two points on the April 14 news of the hostile bid, to 99.25, but have since slipped back to a 98 handle, changing hands at a weighted average of 98.375 at noon ET today. The 3.875% senior notes due 2027 were at 97 at the close and have kept to a two-point range at either side of that level since mid-March.
Musk will leverage his own Twitter shares to provide the remaining $21 billion of financing, as per an equity commitment letter, but the filing makes no mention of any equity partners despite reports that Apollo Global Management and Thoma Bravo have expressed interest in participating in a Twitter bid. The filing shows that Musk is contemplating a tender offer for outstanding Twitter shares at the same $54.20 per share valuation behind his April 14 takeover bid. Twitter management parried that offer and adopted a so-called poison pill to ward off further advances.
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