Musk's bankers mull new Tesla margin loans to slash Twitter debt, reports say

Billionaire Elon Musk's bankers are considering providing the Tesla Inc Chief Executive Officer with new margin loans backed by the US automaker's stock to replace some of the high interest debt on his Twitter deal, Bloomberg News reported on Wednesday.

The margin loans are one of the options that the Morgan Stanley-led bank group and Musk's advisers have discussed to ease the US$13 billion (about RM52.3 billion) debt Twitter took on as part of Musk's US$44 billion deal, the report said, citing people with knowledge of the matter.

The discussions have so far centered around replacing the US$3 billion of unsecured debt on which Twitter pays an interest rate of 11.75%, the maximum banks had agreed to finance the acquisition in April, the report said.

Morgan Stanley, Bank of America Corp, Barclays Plc and Mitsubishi UFJ Financial Group Inc the US$13 billion financing for the bid by Musk.

Tesla and Morgan Stanley did not immediately respond to a Reuters request for comment.

The banks are not expected to offload any of the Twitter debt to institutional investors until the new year, Bloomberg reported.

Reuters reported in October that banks had abandoned plans to sell the debt to investors because of uncertainty around Twitter's fortunes and losses.

Musk closed the deal with US$13 billion in loans from banks and a US$33.5 billion equity commitment, which included his 9.6% Twitter stake worth US$4 billion and US$7.1 billion from investors including Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal.