The banks which loaned Elon Musk money to help buy Twitter expect to lose $2 billion on the debt, report says

• Wall Street helped Elon Musk buy Twitter last year by loaning him $13 billion.
• The banks are now preparing to unload the debt, and expect to take a 15% hit, per the WSJ.

The banks which helped Elon Musk take over Twitter are expecting to lose $2 billion on the loans they gave him, according to The Wall Street Journal.

When the world's richest person agreed to buy the social media company for $44 billion last October, $13 billion was loaned by the likes of Morgan Stanley, Bank of America, and Barclays. The loans are backed by some of Musk's Tesla stock.

In the year Musk has owned the platform, X — as Twitter is now called — has faced a number of struggles.

Downloads of the app fell by almost 30% between July and September, according to data from Apptopia. And the marketing consultancy Ebiquity, which works with 70 of the world's top 100 advertisers, says just two of them advertised on X last month.

Fidelity, the asset manager which owns a stake in the company, has marked Twitter's valuation down by two-thirds. That would make the company worth around $15 billion.

According to The Wall Street Journal, Musk's lenders have started preparing to unload the debt.

Bankers close to the deal told The Journal that X could be given a junk-bond rating, meaning it is at risk of defaulting on the loans, due to both Musk's controversial management style and a waning ad market.

People familiar with the matter told the newspaper that the banks are expecting to take a hit of 15%, or $2 billion in total.

For the banks which hold the largest pieces, like Morgan Stanley and BofA, that would mean hundreds of millions in losses, according to the Journal.

X, Morgan Stanley, BofA, and Barclays did not immediately respond to Insider's request for comment, sent outside US working hours.