Morgan Stanley Divests $3 Billion of X Holdings Debt
Morgan Stanley is nearing completion of a $3 billion sale of X Holdings Corp. debt, marking significant progress in its ongoing efforts to divest loans related to Elon Musk's acquisition of Twitter.
Sources close to the matter, requesting anonymity, reveal that the senior secured term loan, bearing a fixed rate of 9.5%, will be sold at par value due to overwhelming investor demand. This marks the third transaction in a flurry of activity over the past month, with Morgan Stanley leading a syndicate of seven Wall Street banks to offload a total of $6.5 billion in X debt.
The current sale, bringing the total divested amount to $9.5 billion, leaves the banks with only $3 billion remaining on their books. This represents a remarkable turnaround for a financing that initially faced significant skepticism over Musk's high purchase price and concerns about policy changes affecting advertiser revenue.
However, Musk's close relationship with former President Donald Trump, including an advisory role, has positively influenced investor perceptions of X's prospects. Investors anticipate that Musk's political influence will benefit his business interests, despite his aggressive cost-cutting measures causing turmoil in Washington.
Morgan Stanley, which advised Musk on the Twitter acquisition, led the financing and sales and holds the largest share of X debt. Other holders include Bank of America Corp., Barclays Plc, Mitsubishi UFJ Financial Group Inc., BNP Paribas SA, Mizuho Financial Group Inc., and Societe Generale SA.