Morgan Stanley is completing the sale of another $3 billion in X Holdings Corp. debt, advancing a years-long effort to offload loans that aided Elon Musk's tumultuous acquisition of the social-media platform.
The bank intends to sell the senior secured term loan, which has a fixed rate of 9.5%, at no discount to face value after receiving more than enough demand from investors, according to people familiar with the matter who asked not to be identified while discussing private deal terms.
It is the third transaction in less than a month in which Morgan Stanley led a group of seven Wall Street banks in the sale of $6.5 billion of X debt. This sale would raise that figure to $9.5 billion, leaving the banks with only an additional $3 billion on their books.
The sales represent a surprising turnaround in what had long been regarded as a doomed financing of Musk's 2022 takeover of the platform formerly known as Twitter Inc. Banks typically sell debt into the market immediately following a buyout, but investors were skeptical, concerned about the price Musk paid and that his changes to content-moderation policies would drive advertisers away.
However, the billionaire's close ties to President Donald Trump, which include an advisory role, have quickly altered perceptions of X's prospects. Investors expect Musk's position in the administration to benefit his business interests, despite the fact that his aggressive government cost-cutting efforts have caused disruption in Washington.
Morgan Stanley first tested investor appetite with a $1 billion loan sale priced between 90 and 95 cents on the dollar. It quickly followed up with a sale that was originally planned for $3 billion but received strong demand following a full-fledged marketing campaign that included a meeting with X executives. The bank increased the size to $5.5 billion and was able to sell it for 97 cents per dollar.
Morgan Stanley advised Musk on the acquisition, led financing and sales, and held the majority of X debt. Other shareholders include Bank of America Corporation, Barclays Plc, Mitsubishi UFJ Financial Group Inc., BNP Paribas SA, Mizuho Financial Group Inc., and Societe Generale SA.
