Log in
Log in
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
Sign up
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     

MITSUBISHI UFJ FINANCIAL GROUP, INC

(8306)
  Report
Delayed Japan Exchange  -  01:00 2022-12-09 am EST
754.80 JPY   +0.99%
12/08Japan's GDP Contracts Less Than Initially Estimated in Q3 on Stronger Exports, Domestic Demand
MT
12/08Investors revive wagers on Bank of Japan policy change
RE
12/07Musk's bankers mull new Tesla margin loans to slash Twitter debt - Bloomberg News
RE
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisionsFunds 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Banks financing Musk's Twitter deal face hefty losses

10/04/2022 | 11:05pm EST
Illustration shows Twitter logo and stock graph

(Reuters) - Elon Musk's U-turn on buying Twitter Inc could not have come at a worse time for the banks funding a large portion of the $44 billion deal and they could be facing significant losses.

As in any large acquisition, banks would look to sell the debt to get it off their books. But investors have lost their appetite for riskier debt such as leveraged loans, spooked by rapid interest rate hikes around the world, fears of recession and market volatility driven by Russia's invasion of Ukraine.

While Musk will provide much of $44 billion by selling down his stake in electric vehicle maker Tesla Inc and by leaning on equity financing from large investors, major banks have committed to provide $12.5 billion.

They include Morgan Stanley, Bank of America Corp and Barclays Plc.

Mitsubishi UFJ Financial Group Inc, BNP Paribas SA, Mizuho Financial Group Inc and Societe Generale SA are also part of the syndicate.

Noting other recent high-profile losses for banks in leveraged financing, more than 10 bankers and industry analysts told Reuters the outlook was poor for the banks trying to sell the debt.

The Twitter debt package is comprised of $6.5 billion in leveraged loans, $3 billion in secured bonds, and another $3 billion in unsecured bonds.

"From the banks' perspective, this is less than ideal," said Wedbush Securities analyst Dan Ives. "The banks have their backs to the wall - they have no choice but to finance the deal."

Leveraged financing sources have also previously told Reuters that potential losses for Wall Street banks involved in the Twitter debt in such a market could run to hundreds of millions of dollars.

Societe Generale did not respond to a request for comment while the other banks declined to comment. Twitter also declined to comment. Musk did not immediately respond to a request for comment.

Just last week, a group of lenders had to cancel efforts to sell $3.9 billion of debt that financed Apollo Global Management Inc's deal to buy telecom and broadband assets from Lumen Technologies Inc.

That came on the heels of a group of banks having to take a $700 million loss on the sale of about $4.55 billion in debt backing the leveraged buyout of business software company Citrix Systems Inc.

"The banks are on the hook for Twitter -- they took a big loss on the Citrix deal a few weeks ago and they're facing an even bigger headache with this deal," said Chris Pultz, portfolio manager for merger arbitrage at Kellner Capital.

Banks have been forced to pull back from leveraged financing in the wake of Citrix and other deals weighing on their balance sheet and that is unlikely to change anytime soon.

The second quarter also saw U.S. banks start to take a hit on their leveraged loans' exposure as the outlook for dealmaking turned sour. Banks will begin reporting third-quarter earnings next week.

(Reporting by Anirban Sen, additional reporting by Megan Davies, Lananh Nguyen, Sheila Dang and Hyunjoo Jin; Writing by Paritosh Bansal; Editing by Edwina Gibbs)

By Anirban Sen


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
APOLLO GLOBAL MANAGEMENT, INC. 0.08% 62.88 End-of-day quote.-13.19%
BANK OF AMERICA CORPORATION -0.18% 32.38 Delayed Quote.-27.22%
BARCLAYS PLC 1.71% 159.48 Delayed Quote.-14.72%
BNP PARIBAS 1.71% 52.89 Real-time Quote.-12.97%
LUMEN TECHNOLOGIES, INC. 1.67% 5.49 Delayed Quote.-56.26%
MITSUBISHI UFJ FINANCIAL GROUP, INC 0.99% 754.8 Delayed Quote.20.79%
MIZUHO FINANCIAL GROUP, INC. 0.27% 1686.5 Delayed Quote.15.28%
MORGAN STANLEY 0.88% 89.47 Delayed Quote.-9.65%
SOCIÉTÉ GÉNÉRALE 1.43% 22.63 Real-time Quote.-25.08%
TESLA, INC. 3.23% 179.05 Delayed Quote.-49.17%
All news about MITSUBISHI UFJ FINANCIAL GROUP, INC
12/08Japan's GDP Contracts Less Than Initially Estimated in Q3 on Stronger Exports, Domestic..
MT
12/08Investors revive wagers on Bank of Japan policy change
RE
12/07Musk's bankers mull new Tesla margin loans to slash Twitter debt - Bloomberg N..
RE
12/04Megmilk Snow Plans 5 Billion Yen Sale of Green Bond
MT
12/01Mitsubishi Ufj Financial : Notice Regarding Progress on Repurchase and Completion of Cance..
PU
11/30Fall in Japan Industrial Output Worse Than Expected in October Amid Global Slowdown
MT
11/30Nissan gets $1.44 billion green loan for zero-emission mobility investments
RE
11/30Tourism Holdings Limited (NZSE:THL) completed the acquisi..
CI
11/28Tokyo Shares Retreat as China COVID-19 Infections Set New Record; Toshiba Eyes Privatiz..
MT
11/25Tokyo Inflation Data Hits 40-Year High, Pushing Asian Equities Slightly Higher
MT
More news
Analyst Recommendations on MITSUBISHI UFJ FINANCIAL GROUP, INC
More recommendations
Financials
Sales 2023 4 168 B 30 565 M 30 565 M
Net income 2023 1 045 B 7 659 M 7 659 M
Net Debt 2023 - - -
P/E ratio 2023 8,86x
Yield 2023 4,31%
Capitalization 9 426 B 69 121 M 69 121 M
Capi. / Sales 2023 2,26x
Capi. / Sales 2024 2,28x
Nbr of Employees 134 443
Free-Float 88,6%
Chart MITSUBISHI UFJ FINANCIAL GROUP, INC
Duration : Period :
Mitsubishi UFJ Financial Group, Inc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends MITSUBISHI UFJ FINANCIAL GROUP, INC
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 10
Last Close Price 754,80 JPY
Average target price 850,00 JPY
Spread / Average Target 12,6%
EPS Revisions
Managers and Directors
Hironori Kamezawa President, Group CEO & Representative Director
Tetsuya Yonehana Chief Financial Officer & Representative Director
Hiroki Kameda Group Chief Information Officer
Takayoshi Futae Group Co-COO & GM-Global Commercial Banking
Tsutomu Okuda Independent Outside Director
Sector and Competitors