Banks seek to sell Elon Musk’s X debt for US$ 3 billion

The banks that financed the purchase of X, formerly Twitter, will attempt to sell $3 billion in debt tied to Elon Musk's acquisition of the company this week.

Morgan Stanley, Bank of America, Barclays, Société Générale and BNP Paribas provided $13 billion in financing in 2022. Since then, they have faced difficulties selling the debt in the secondary market.

The lenders expect to sell the loans at 90 to 95 cents on the dollar. That's an improvement over bids in 2022, when proposals were barely 80% of face value, according to . That year, the owner of Tesla and SpaceX bought the social network for $44 billion.

X's debt has remained on bank balance sheets for longer than usual. According to PitchBook LCD, it is the longest-delayed deal since the 2008 financial crisis.

Factors complicating the sale

Musk's management, with massive layoffs and changes in content moderation policies, generated uncertainty among advertisers, affecting X's revenues. This complicated the valuation of debt by potential buyers.

However, Donald Trump' s victory in the election has generated a revaluation of the debt. Musk is a recognized ally of the former president and his companies could benefit from the new administration.

Selling strategy of the banks

Morgan Stanley has begun contacting investors to offer the debt package. According to Morgan Stanley, the sale could take place in the next few days with a lower loss for the financial institutions.

If the deal goes through on the expected terms, it would mark a partial exit for the banks, which still hold part of the original $13 billion debt.

Musk's statements and denials

Recently, it reported that Musk sent an internal email admitting financial problems at X, stating that user growth has stagnated and revenues are low.

However, Musk published shortly after a message on his social network in which he denied having sent such an email and stated that the information is incorrect.