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Big Law

Twitter Pays First Interest Payment on Debt from Musk Buyout

Twitter has made its first interest payment on its more than $12.5 billion in looming debt, according to reports from Bloomberg and the Financial Times. Elon Musk took out billions of dollars in loans back in October 2022, as part of the billionaire’s successful push to purchase Twitter and take the social media platform private. And, through that $44 billion acquisition deal, the nearly $13 billion in loan debt became Twitter’s responsibility.

The initial interest payment, due and presumably paid on Friday, likely cost the company an estimated $300 million, according to Bloomberg. Twitter reportedly paid that amount to seven banks, led by Morgan Stanley, which initially provided the acquisition funds.

The company making its first interest payment on time is a good sign, or rather it’s better than the alternative. But this initial $300 million doesn’t come close to resolving the immense sum owed. According to earlier Bloomberg calculations, Twitter will have to pay about $1 billion towards its debt every year in order to keep up with it. Annual interest alone could exceed $1.2 billion, Bloomberg reported on Monday. In contrast, pre-Musk, the company paid somewhere around $100 million in annual interest.

Read the source article at news.yahoo.com

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