Banks led by Morgan Stanley have offloaded another major chunk of the $13 billion debt that financed Elon Musk’s controversial $44 billion acquisition of Twitter (now X) in 2022, Reuters has reported, citing sources.
The latest sale, completed on Thursday, involved $4.74 billion in secured loans that will mature in October 2029, marking a near-complete exit for banks that had been forced to hold onto the debt for nearly two years—a highly unusual situation in corporate financing.
With this sale, banks including Bank of America, Barclays, Mitsubishi UFJ, BNP Paribas, Mizuho, and Société Générale have now successfully offloaded almost all of the debt, leaving only $1.3 billion in unsecured loans on their books. The timing of that final sale remains uncertain, according to the sources.
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The latest batch of loans was priced at par (100 cents to the dollar) and paid a fixed yield of 9.5%, reflecting strong demand from institutional investors. Initially, banks had planned to sell $2.97 billion in secured loans, but the overwhelming interest led them to increase the offering to $4.74 billion.
This sale follows a $5.5 billion term loan sale in early February, which came after a $1 billion private sale of the same loans. The February deal was priced with a floating interest rate, at 97 cents to the dollar, yielding 11%. The fact that those loans were later bid higher by investors appears to have paved the way for the latest round of sales.
Unlike previous tranches, the latest loan sale involved fixed-rate debt, making it a rare transaction in leveraged financing. According to the International Financing Review (IFR), this was the largest-ever fixed-rate loan sale in the leveraged loan market.
Why Investors Are Now Betting on X
Banks typically sell such debt shortly after financing a deal, but the Twitter/X loans had become a major liability, forcing lenders to hold onto them far longer than usual. The reasons behind this delay were tied to X’s financial struggles, including a mass exodus of advertisers, ongoing losses, and Musk’s chaotic leadership. These factors made X’s future revenue potential uncertain and discouraged investors from purchasing the debt at favorable terms.
However, two key factors have shifted investor sentiment and made X a more attractive bet.
One major factor is Donald Trump’s election victory in November. Musk, who has positioned himself as a close ally of the former president, is seen as someone who could benefit from a Trump presidency. Investors are anticipating that Trump’s return to the White House will open the door for more conservative advertisers, potentially reversing the revenue losses X suffered when major brands pulled their ads due to content moderation concerns. This political dynamic is giving investors confidence that X’s financial outlook could improve under a new administration.
Another key selling point for investors is the exposure to Musk’s artificial intelligence startup, xAI. While X itself remains a struggling social media platform, Musk has increasingly linked it to his broader AI ambitions. Investors see xAI as a promising venture that could give X a strategic edge in the artificial intelligence space. By purchasing the debt, investors are also gaining indirect exposure to xAI’s growth potential, making the investment more appealing.
The Last Remaining Challenge: The $1.3 Billion in Unsecured Debt
Despite the successful sale of most of the debt, $1.3 billion in unsecured loans remains on bank balance sheets. These loans carry higher risk and lower priority for repayment, making them a much harder sell to investors. Sources say the banks have yet to determine the best timing or strategy for selling off the remaining portion of the debt.
The prolonged struggle to offload X’s debt has been one of the most challenging financing deals in recent history. Musk’s leveraged buyout of Twitter was one of the most expensive in history, and the financing structure turned into a historic headache for banks when X’s revenue declined sharply.
Now, with a political shift in the U.S. and Musk’s broader technology ambitions, institutional investors appear more willing to take a chance on X’s uncertain future. The latest sales have given banks a long-awaited opportunity to free themselves from a financial burden that had lingered far longer than expected.