Banks Offload Nearly All of Musk’s $13bn Twitter Buyout Debt, With Only $1.3bn Left as Investors Bet on X’s Future

The banks led by Morgan Stanley unloaded another major part of the debt of $ 13 billion which financed a controversial acquisition of $ 44 billion from Elon Musk of Twitter (now X) in 2022, reported Reuters, citing Sources.

The last sale, completed on Thursday, involved $ 4.74 billion in guaranteed loans that will mature in October 2029, marking an almost complete outing for banks that had been forced to keep debt for almost two years – a very unusual situation in business financing.

With this sale, banks such as Bank of America, Barclays, Mitsubishi UFJ, BNP Paribas, Mizuho and General Society have now unloaded almost all of the debt, leaving only $ 1.3 billion in non -guaranteed loans on their books. The time of this final sale remains uncertain, according to sources.

The last batch of loans was at the price (100 cents of the dollar) and paid a fixed return of 9.5%, reflecting strong demand from institutional investors. Initially, the banks had planned to sell $ 2.97 billion in guaranteed loans, but the overwhelming interest led them to increase the supply to $ 4.74 billion.

This sale follows a sale of long -term loans of $ 5.5 billion in early February, which came after a private sale of $ 1 billion from the same loans. The February agreement was at the cost of a floating interest rate, 97 cents from the dollar, which gave 11%. The fact that these loans were then higher by investors seems to have paved the way for the last series of sales.

Unlike the previous slices, the last sale of loans involved a fixed rate debt, making it a rare transaction in leverage funding. According to the International Funding Review (IFR), it was the largest sale of fixed rate loans on the lever loans market.

Why investors are now betting on x

Banks generally sell such a debt shortly after financing an agreement, but Twitter / X loans had become major responsibility, forcing lenders to keep them much longer than usual. The reasons for this delay were linked to the financial difficulties of X, in particular a massive exodus of advertisers, ongoing losses and chaotic leadership of Musk. These factors have made that the future revenues of X allowed uncertain and discouraged investors to buy the debt on favorable conditions.

However, two key factors have changed the feeling of investors and made X a more attractive bet.

A major factor is Donald Trump’s electoral victory in November. Musk, who positioned himself as a close ally of the former president, is considered someone who could benefit from a Trump presidency. Investors predict that Trump’s return to the White House will open the door to more conservative advertisers, potentially reversing the income losses that X has suffered when major brands have drawn their ads due to content moderation problems. This political dynamic gives investors the confidence that X’s financial prospects could improve under a new administration.

Another key sales argument for investors is the exhibition at the Musk artificial intelligence startup, XAI. While X itself remains a social media platform in difficulty, Musk has increasingly linked it to its broader AI ambitions. Investors see XAI as a promising business that could give X a strategic advantage in the space of artificial intelligence. By buying debt, investors also gain an indirect exposure to XAI growth potential, which makes investment more attractive.

The last challenge remaining: the non -guaranteed debt of $ 1.3

Despite the successful sale of most of the debt, $ 1.3 billion in unsuitable loans remain on bank assessments. These loans include a higher risk and a lower priority for reimbursement, making it a much more difficult sale to investors. Sources indicate that banks have not yet determined the best time or the best strategy to sell the remaining part of the debt.

The prolonged struggle to unload X debt was one of the most difficult financing agreements in recent history. Twitter’s Musk’s effect of Musk was one of the most expensive in history, and the financing structure turned into a historic headache for banks when X’s revenues have decreased sharply.

Now, with a political change in the United States and the wider technological ambitions of Musk, institutional investors seem more willing to take their chance on the uncertain future of X. The last sales gave banks a long-awaited opportunity to Release from a financial burden that had lingered much longer than expected.