The score agency, which is among the many high within the US, mentioned the motion was “due to a lack of sufficient information to maintain the rating” in a launch on Friday. At the time of the withdrawal, each Twitter and its debt have been on “CreditWatch,” suggesting an imminent score motion.
Twitter’s large about $13 billion debt load was funded instantly by banks led by Morgan Stanley when Musk’s $44 billion acquisition of the social media big closed. Since then, Musk’s takeover of Twitter has introduced sweeping modifications to the corporate’s operations and product. Those modifications included mass layoffs, modifications in options and a raft of corporations pulling promoting {dollars} from the platform.
The group of banks that funded the buyout now face the problem of syndicating the debt to traders, a lot of whom use score corporations to find out the chance concerned in shopping for credit score.
S&P downgraded the corporate 5 notches to B- from BB+ on Nov. 1 on account of its excessive leverage post-acquisition. The score agency anticipated to “obtain more information regarding the final capital structure and any potential changes to the operating strategy,” in response to the November analysis replace.
Still, the score agency mentioned on the time, that “may not occur until the company’s new debt is syndicated.”
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