Twitter’s credit rating will be lowered by “multiple notches” after Elon Musk’s takeover of the social media company, according to S&P Global Ratings.

Shares of Twitter, (NYSE: TWTR), closed at $49.68 a share, 8.3 percent below the agreed-upon acquisition price of $54.20.

On Monday, Tesla Inc. CEO Elon Musk said that the business had secured $44 billion in debt and margin loan capital and 21.0 billion dollars in equity commitments from other investors.

Earlier this week, S&P stated that Musk’s takeover proposal includes $13 billion in fresh debt financing and a $12.5 billion margin loan against $62.5 billion in Tesla shares, which would lead Twitter’s leverage to “spike considerably” above levels linked to the existing BB+ rating, according to S&P.

According to the rating agency, S&P’s highest “junk” grade is BB+. If Twitter’s capital structure and credit metrics are considered, it may be possible to consolidate the margin loan. Today, Twitter has just $5.29 billion in unpaid debt. Whether or not the margin loan was considered in Twitter’s credit metrics, S&P said that “debt in the capital structure would increase considerably, and leverage would exceed our 1.5x ceiling for the current grade.” The acquisition is projected to lower the issuer’s credit rating by many notches, and it is doubtful that it will rise beyond the “B” category.

According to the current ranking, there is a three-notch drop in the B+ grade to get there.

According to S&P, controlling ownership is considered a big governance risk since the controlling owner may put their interests above other stakeholders, particularly debtholders.

Tweeters are either cheering “free speech” or crying out “RIP Twitter” after Elon Musk’s bid was approved by Twitter’s board of directors. Both parties will be obliged to pay $1 billion if the sale fails.

Twitter’s credit rating has been reviewed by Moody’s Investor Services, which left its Ba2 rating on Tuesday. In addition, Musk’s offer for Twitter would “materially lower” the amount of cash on hand at Twitter, as indicated by Moody’s, since that money would be required to help finance the acquisition.

In addition, Moody has cautioned that “potential legislative changes to third-party content liability protection and data privacy restrictions that may affect its firm” are a danger to Twitter’s financial stability.

Tweeter has dropped by 24.7% last year, while Meta Platforms Inc., the parent company of Facebook and another social media corporation, has dropped by 40.4%. 

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