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Bloomberg
SpaceX slashed the size of the leveraged loan it sought by $500 million, according to people with knowledge of the matter, the latest twist in a saga that had already seen Elon Musk’s closest ally on Wall Street balk at the terms of the deal.
Space Exploration Technologies Corp reduced the loan to $250 million despite having enough investors on board to reach the targeted $750 million, the people said. The seven-year debt priced at 99 cents on the dollar and pays interest at 425 basis points above Libor, within the initial guidance for the bigger loan, the people said.
Investors had negotiated to strengthen loan covenants, especially on the definition of earnings for the cash-burning space exploration company, according to one of the people.
Goldman Sachs Group Inc was initially canvassing investors for a $500 million deal for SpaceX. During marketing of the loan, Musk changed advisers and chose Bank of America to officially launch the deal to investors at $750 million.
The switch surprised bankers and investors, as Goldman is widely viewed as the Wall Street firm closest
to Musk. It helped take Tesla Inc public in 2010, led its
$1.8 billion bond sale last year and advised Musk on his short-lived attempt to take the electric carmaker private for $420 a share.