New York, US: Global banks supporting Tesla CEO, Mr. Elon Musk’s acquisition of the microblogging site, Twitter are holding off from selling debts to investors as the social media platform’s prospects related to profits and losses remain uncertain, sources revealed.

The banks, reportedly, do not intend to syndicate the debt and are interested in keeping it on their balance sheet until there is improved investor interest.

Leading banks such as Barclays, Morgan Stanley, and Bank of America, who are associated with the deal have remained tight-lipped on the matter. Representatives of Mr. Musk as well as Twitter have also avoided commenting on the matter.

Earlier in April, before the Federal Reserve began hiking interest rates to combat inflation, Mr. Musk was willing to pay $44 billion for Twitter. The banks would have to suffer financial damage totaling hundreds of millions of dollars to get the purchase financing off their books because it made the acquisition financing appear too cheap in the eyes of credit investors.

Confusion regarding the deal’s completion also prevented the banks from promoting the debt.

Mr. Musk has attempted to back out of the agreement, claiming Twitter deceived him about the volume of spam accounts on the platform. Eventually, the Telsa CEO had to follow a Delaware court judge’s order earlier this month to complete the transaction by the deadline of October 28.

With Mr. Musk remaining silent about the changes in the leadership of Twitter, many debt investors are holding off until they receive more information on the micro-blogging site’s new structure and business plan.

The risky junk-rated loans and secured and unsecured bonds make up the debt package for the Twitter transaction.

Investors are being urged to steer clear of some junk-rated securities due to rising interest rates and general market instability. For instance, the selling of the $4.55 billion in debt used to support the leveraged buyout of Citrix Systems by Wall Street banks led by Bank of America resulted in a $700 million loss.

After failing to find buyers, a group of banks abandoned efforts to sell $4 billion in debt that had been used to finance Apollo Global Management’s acquisition of telecom and internet assets from Lumen Technologies in September.

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