It took just days for banks across Wall Street to cobble together a $25.5bn financing package for Elon Musk’s bid for Twitter, an exercise that would normally take weeks. The speed stumped Twitter’s advisers: how could banks’ buttoned-up risk management committees get comfortable with the deal so quickly?
As one person involved in the debt financing explained, the due diligence “was easy. There was none. Not in the classic sense.”
The $44bn Twitter buyout shows how the Wall Street machine has grown more comfortable with debt and its associated risks, particularly when the person in need of cash is one of the wealthiest in the world. It also raises questions about how far lenders are willing to go to win business — and lucrative fees — and what might happen if they misjudge the risks.