Elon Musk’s Twitter deal could fuel the leveraged buyout market

Elon Musk’s antics have made it difficult for his banks – Morgan Stanley, Bank of America and Barclays – to sell the debt needed to close the Twitter deal. So they’re just gonna keep it, all $13 billion of it, The Wall Street Journal reports. Truly a next-level “hold-my-beer” move, as it threatens to bring leveraged buyouts to a halt.

Usually, a bank sells the debt used to create a buyout and moves on to the next deal. But since they’re holding Musk’s beers, they don’t have a free hand to hold anyone else’s. Or, like the WSJ It states, “The Twitter movement threatens to bring the faltering leveraged buyout pipeline to a halt by committing capital that Wall Street could otherwise use to support new deals.”

Part of the reason for holding Musk’s guilt is that his appetite for it has declined due to: (waves vaguely at the Fed) financial conditions. But part of it is Musk’s mercurial approach to the deal:

Mr. Musk and Twitter have until October 28 to finalize his planned purchase, and there is still no guarantee that the unpredictable billionaire will continue or that no other problems will arise. (If the deal isn’t finalized by then, the two parties will go to court in November.) the banks would not have enough time to market the debt to outside investorsa process that normally takes weeks, even if they would like to sell it now.

Emphasize mine, of course. The downside of being unpredictable is that money types really don’t like surprises!