Some banks that lent Elon Musk $13 billion to buy Twitter are preparing to book losses on the loans this quarter, sources say.
SocGen, Musk and representatives for Twitter did not respond to emailed requests for comment. Representatives from the other banks declined to comment.Under accounting standards, the banks must mark the loan to its market value when some of them report earnings for the fourth quarter in January, several bankers and accountants said.
Each bank would make market checks with two or three potential buyers to arrive at a value of the loans, which an auditor would have to agree with, one of the three sources said. Projected losses could also be divided between investment banking and trading divisions, making it small enough that it doesn't have to be disclosed separately, one of the sources said. Any writedowns would probably be broken into chunks and spread over several months, reducing the hit to earnings in any one quarter, two of the sources with direct knowledge of the matter said.
In September, Wall Street lenders led by Bank of America suffered a $700 million loss on the sale of about $4.55 billion in debt backing the leveraged buyout of business software company
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