Banks offload $3 billion in senior debt at a discounted price for Elon Musk's X.

From Nasdaq: 2025-01-24 16:41:57

A consortium of banks led by Morgan Stanley is gearing up to sell $3 billion of senior debt related to Elon Musk’s acquisition of X (formerly Twitter) at a discounted price of 90-95 cents on the dollar. This move comes after struggling to offload $13 billion in debt from the 2022 deal in volatile market conditions.

The debt sale, expected to launch next week, involves banks like Bank of America, Barclays, and Mitsubishi UFJ Financial Group. Despite selling a $1 billion tranche privately this year, banks still hold junior debt from the buyout on their balance sheets. Market watchers are keen to see investor appetite for the discounted debt package and its impact on future leveraged buyout debt transactions.

The sale of $3 billion in senior debt tied to Elon Musk’s acquisition of X at a discounted price presents an opportunity for banks to improve financial flexibility by reducing exposure to the $13 billion debt burden. Investor interest in the debt sale could set a positive precedent for future transactions, while the successful offloading of debt may stabilize banks’ financial performance.

However, challenges remain as the discounted sale price reflects the difficulty in marketing the debt. X’s financial struggles, including a significant revenue decline in 2023, raise concerns about meeting future debt obligations. The lingering reputational damage from this deal could impact banks’ relationships with clients, while market volatility and skepticism may deter institutional investors from participating in the sale.



Read more at Nasdaq: Musk’s X Buyout Debt Tests Investor Appetite as Banks (MS) Offload $3B