Twitter Inc. made its first interest payment under Elon Musk’s helm, according to people with knowledge of the matter, after the billionaire took the social media company public last year using some $12.5 billion in debt.
Twitter Inc. made its first interest payment under Elon Musk’s helm, according to people with knowledge of the matter, after the billionaire took the social media company public last year using some $12.5 billion in debt.
Twitter paid off a group of seven banks, led by Morgan Stanley, that were stuck with debt after they failed to sell it to outside investors.
Representatives for Morgan Stanley and Musk did not immediately respond to requests for comment.
The first coupon was expected to cost Twitter about $300 million, according to estimates by Bloomberg and market participants not involved in the Twitter operation. Payment was due around January 27, about three months after the transaction closed.
Twitter’s debt includes a $6.5 billion loan that the banks originally expected to sell to institutional investors and $6 billion in bridge loans, split evenly between a secured and unsecured tranche, that the banks had planned to sell in the form of Junk bonds.
Musk said in a conversation on Twitter Spaces in late December that the company has about $1 billion in cash on its balance sheet. But he’s also openly floated the idea of bankruptcy, citing a “massive drop” in revenue as some advertisers left the platform and cutting staff since closing his $44 billion leveraged buyout in late October.