Elon Musk's Twitter Acquisition and the Debt Structure

Elon Musk's purchase of Twitter for approximately $44 billion was largely financed through $13 billion in loans from a consortium of banks, including major players like Morgan Stanley and Bank of America. The acquisition was attractive for these banks, not only because of the opportunity to work with the richest man in the world but also due to the potential for lucrative fees from Musk’s other ventures such as Tesla and SpaceX. Given Twitter's inconsistent profitability, the banks charged high interest rates on these loans, projecting an annual payment of over a billion dollars. Initially, the banks planned to quickly offload the debt to outside investors, a strategy they typically employed in high-return situations to mitigate long-term risk.