Twitter’s credit standing withdrawn by S&P over lack of knowledge

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Twitter Inc.’s credit score grade was withdrawn by S&P International Rankings, which mentioned it lacked ample data to proceed overlaying the Elon Musk-owned social media firm.

The ranking agency, which is among the many prime within the US, mentioned the motion was “attributable to a scarcity of ample data to keep up the ranking” in a launch on Friday. On the time of the withdrawal, each Twitter and its debt have been on “CreditWatch,” suggesting an imminent ranking motion. 

Twitter’s large about $13 billion debt load was funded straight by banks led by Morgan Stanley when Musk’s $44 billion acquisition of the social media large closed. Since then, Musk’s takeover of Twitter has introduced sweeping adjustments to the corporate’s operations and product. These adjustments included mass layoffs, adjustments 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 buyers, lots of whom use ranking corporations to find out the danger concerned in shopping for credit score. 

S&P downgraded the corporate 5 notches to B- from BB+ on Nov. 1 because of its excessive leverage post-acquisition. The ranking agency anticipated to “acquire extra data concerning the ultimate capital construction and any potential adjustments to the working technique,” in line with the November analysis replace.

Nonetheless, the ranking agency mentioned on the time, that “could not happen till the corporate’s new debt is syndicated.”

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