Morgan Stanley set to sell US$3 billion of X debt at no discount

Morgan Stanley is finalizing the sale of another US$3 billion (HK$23.4 billion) of X Holdings debt, making further progress in a years-long effort to offload loans that supported Elon Musk’s tumultuous purchase of the social-media platform.

The bank plans to sell the senior secured term loan, which carries a fixed rate of 9.5 percent, at no discount to face value after receiving more than enough demand from investors, according to people with knowledge of the matter, who asked not to be identified discussing private deal terms.

It is the third transaction in a frenetic period of less than a month, during which Morgan Stanley led a group of seven Wall Street banks to sell a total of US$6.5 billion in X debt. This sale would increase that amount to US$9.5 billion, leaving the banks with only another US$3 billion slug on their books.

The sales mark a surprising turnaround for what had long been seen as an ill-fated financing of Musk’s 2022 takeover of the platform previously known as Twitter Banks typically sell debt into the market immediately after such a buyout, but investors balked at the idea, concerned about the price Musk had paid and that his changes to content-moderation policies would drive away advertisers.