GuShiio.com ① According to reports, banks led by Morgan Stanley have further sold their debt held by social media platform Company X, leaving only US$1.3 billion in debt on their books;
② In addition to Morgan Stanley, Bank of America, Barclays Bank, Mitsubishi UFJ, BNP Paribas, Mizuho Bank and Societe Generale also participated in the sale.
Cailian News, February 15 (Editor Xia Junxiong)According to media quoted sources, banks led by Morgan Stanley have further sold their debt held by social media platform Company X, leaving only US$1.3 billion in debt on their books.
Company X is currently owned by Elon Musk, the world’s richest man, who acquired the then-Twitter Company for $44 billion in October 2022 and later renamed it X.
In order to complete the acquisition, Musk not only sold a large amount of Tesla shares, but also borrowed approximately $13 billion from Wall Street institutions.
Specifically, these loans include $6.5 billion in guaranteed term loans,$500 million in revolving credit loans,$3 billion in unsecured loans and $3 billion in guaranteed loans.
After accepting X, Musk carried out radical reforms, and a large number of advertisers fled X, causing the company’s valuation to shrink significantly. In September last year, an investment institution said that X’s valuation had shrunk to US$9.4 billion, down nearly 80% from the purchase price.
Wall Street banks completed secondary sales of $4.74 billion worth of secured loans on Thursday that will mature in October 2029, sources said. It is understood that these loans carry a fixed interest rate of 9.5%, and are sold at 100% face value. The sale was expanded from the originally planned $2.97 billion.
In addition to Morgan Stanley, Bank of America, Barclays Bank, Mitsubishi UFJ, BNP Paribas, Mizuho Bank and Societe Generale also participated in the sale.
After the transaction was completed, these banks had basically emptied their X debt, leaving only $1.3 billion in unsecured loans. Sources said it was unclear when the last loan would be sold.
In early February, the banks sold $5.5 billion in term loans, and earlier they privately sold $1 billion in similar loans. The loans carried an interest rate of 11% and were sold at 97% of face value.
There are two main reasons why Wall Street banks were able to successfully dispose of X debt.
One reason is that with Trump returning to the White House and Musk playing an important role in the new administration, the market expects X’s revenue to improve.
Another attraction for investors is that they will gain exposure to Musk’s artificial intelligence startup xAI through the deal. According to media reports, xAI plans to conduct a new round of financing of approximately US$10 billion at a valuation of approximately US$75 billion.
