Elon Musk’s Twitter LBO debt from his October 2022 buyout has turned out to be a millstone around the neck of the banks that funded the deal.

Elon Musk’s acquisition of Twitter could go down as the worst LBO (leveraged buyout) deal for banks since the 2008 global financial crisis in the latest perturbing sign the deal is proving dear to Tesla shareholders. While Elon Musk himself pooled in more than half of the $44 billion price, some $13 billion was raised from a consortium of lenders to avoid overwhelming Tesla shareholders after the tech magnate liquidated billions of dollars in Tesla stock.

Usually, Wall Street banks will underwrite the debt financing from big deals, later on packaging and selling the debt on to professional investors like hedge funds and pension plans within weeks or at times months. But the bad timing of the October 2022 Twitter deal, struck just when borrowing costs started to climb, combined with the awful financials of the social media company, soured any craving on the part of money managers.

Almost two years on, investment banks have failed to offload the debt, tying up prized capital and limiting their capacity to originate and finance more deals. Actually, no LBO debt has sat longer on balance sheet since the Lehman Brothers bankruptcy, according to new info from PitchBook LCD cited by the WSJ on Tuesday.

The prior record was 13 months stemming from the 2007 purchase of car-parts group Tower Automotive by private equity firm Cerberus during the peak of the subprime bubble. The data does not provide any hint as to whether X had breached its loan covenants, typically the first sign of distress, and the firm did not reply to a Fortune request for comment. But reporting in recent months has indicated that Elon Musk recurrently sought to assuage banker apprehensions even as he sought less arduous terms.

Unsustainable debt

When the deal was struck Twitter was expected to bear over $1 billion in yearly interest, before capital spending and operating expenses. That’s a grave problem, given that revenue in its core U.S. market may be tracking to round about $600 million this year, and even preceding the Musk acquisition, Twitter had struggled to monetize its user base. Elon Musk is said to have held repeated talks with bankers to deliberate restructuring the debt to realize more financially sustainable terms. But as per a report those talks have come to a stalemate. Even though it remains unclear whether X is presently paying its debt, indications from at least one bank show that this is having effect on the lenders’ bottom line.