Musk's xAi increases yield on $5 billion debt raise through Morgan Stanley

From Yahoo Finance: 2025-06-20 11:03:00

Elon Musk’s xAi is increasing the yield on a $5 billion debt raise led by Morgan Stanley, offering a 12.5% yield on $3 billion in bonds and a $1 billion term loan at 725 basis points over SOFR. Junk-rated bonds average a 7.602% yield to maturity. Investor commitments deadline extended to Friday.

The increase in the yield offer for xAi may indicate investors sought higher returns, limiting borrower flexibility. The offering, reported amidst Musk and Trump’s social media exchange, lacked significant interest from high-yield and leveraged loan investors. Morgan Stanley’s involvement in the deal is described as a “best efforts” transaction.

Morgan Stanley did not commit to selling a specific amount or provide capital in xAi’s debt deal unlike when Musk acquired Twitter. xAi and Morgan Stanley declined to comment on the matter. Allocations for the debt raise will be done one day after closing, with possible closing on Friday and allocations on Monday.

Read more: Musk’s xAi increases yield offer on $5 billion debt raise, source says