Final Loan Tranche Moves at Steep Discount
A consortium led by Morgan Stanley, Bank of America, Barclays and Mitsubishi UFJ has sold the last $1.2 billion of loans tied to Elon Musk’s $44 billion takeover of Twitter—now X—at 98 cents on the dollar, yielding 9.5%. The move clears nearly all of the $13 billion in debt these banks held since funding the buyout.
Deal Structure and Documentation
Musk’s acquisition was financed via a $6.5 billion secured term loan, a $500 million revolver, $3 billion of unsecured debt and another $3 billion of secured debt. Details on these debt instruments, including amendments and transfers, are filed with the SEC—investors can quickly access the official offering documents and amendments through Financial Modeling Prep’s SEC Filings API, which tracks real?time filing updates.
Market Reaction and Yield Dynamics
Banks seized the opportunity to offload the leveraged loans after improving sentiment around X’s revenue prospects and Musk’s political ties. Selling at a discount to face value pushes the effective cost of borrowing higher, but it frees balance?sheet capacity for the lenders. Yields near 9.5% reflect both credit risk and the steep terms investors demand for high-yield paper.
Implications for Lenders and Musk
With this tranche sold, participating banks can reduce loan-loss reserves and redeploy capital elsewhere, while Musk’s refinancing options may now hinge on how swiftly X’s cash flow can cover interest obligations. Future debt offerings for Musk’s ventures—such as xAI—will likely reference the market benchmarks set by these rates.