Banks Successfully Sell $5.5 Billion of X Debt at 97 Cents on the Dollar

Banks led by Morgan Stanley have sold $5.5 billion of the $13 billion in debt they lent to support Elon Musk’s $44 billion acquisition of Twitter, now called X, in 2022.

The sale was made to a small group of investors, with a total of $5.5 billion being sold out of the original $13 billion.

The banks involved in the deal include Morgan Stanley, Bank of America, Barclays, Mitsubishi UFJ, BNP Paribas, Mizuho, and Societe Generale. These banks had earlier tried to sell the debt but faced challenges in 2022.

In this new attempt, the banks offered the debt at 90-95 cents on the dollar but managed to sell it at a higher price of 97 cents on the dollar. This sale will provide investors with an 11% yield.

This is the second attempt by banks to sell the debt, with the first one in late 2022 not attracting much interest. At that time, the unsecured loan was only offered at around 60 cents on the dollar, which would have resulted in a significant loss for the banks.

The sale now, priced at 97 cents, is likely to result in a profit.

The banks had been holding onto the debt longer than usual due to difficulties with Musk’s changes to Twitter, which caused a decrease in revenue and raised concerns about a possible default.

However, investor confidence seems to have improved, especially with Musk’s relationship with former President Trump and his control over xAI, which is linked to the platform. Some investors saw the potential in the X platform, but others were skeptical about the future growth of X’s revenues.

Despite the improved pricing, some investors chose not to participate due to uncertainty over the platform’s revenue outlook.

Banks such as Bank of America, Barclays, BNP Paribas, Mizuho, and Societe Generale declined to comment on the matter.