Debt Overhang Cleared: Financial institutions Conclude X Loan Sales

A consortium of major financial institutions, including morgan stanley, Bank of America, Barclays, and Mitsubishi UFJ, have successfully divested the remaining portion of debt associated with Elon Musk’s $44 billion acquisition of the social media platform X (formerly known as Twitter). This move signifies a crucial step in resolving the financial complexities surrounding the high-profile takeover.

The sale,finalized recently,involved $1.2 billion in loans, reportedly sold at $0.98 per dollar, indicating a slight discount. This development comes after months of navigating a challenging debt market and reflects the ongoing efforts to restructure the financial obligations tied to the X acquisition.

Details of the Debt Offering

Earlier in April, reports surfaced that Morgan Stanley was offering the debt in the form of a fixed-income loan, carrying an interest rate of 9.5% and priced between $0.975 and $0.98 per dollar. This offering was part of a broader strategy to offload the significant debt burden incurred during the acquisition process.

The initial financing package for Musk’s acquisition was extensive, involving multiple layers of debt instruments. These included:

• $6.5 billion in secured loans
• A $500 million revolving credit facility
• $3 billion in unsecured loans
• An additional $3 billion in secured loans

Morgan Stanley, along with six other lenders, played a pivotal role in underwriting the $13 billion debt package that facilitated Musk’s takeover of the social media giant.

Market Reaction and Future Outlook for X

The accomplished sale of this debt is likely to be viewed positively by investors, potentially easing concerns about the financial stability of X. However, the company still faces significant challenges, including increasing competition in the social media landscape and the need to demonstrate sustainable profitability.

As of Q1 2025, X’s advertising revenue has seen a modest increase of 5% compared to the previous quarter, according to recent industry reports. Though, this growth is overshadowed by the substantial debt servicing costs and ongoing investments in new features and infrastructure.

The completion of this debt sale marks a significant milestone in the ongoing saga of Elon Musk’s acquisition of X. while challenges remain, this move provides a more stable financial foundation for the company as it navigates the evolving social media landscape.The focus now shifts to X’s ability to innovate, attract users, and generate sustainable revenue growth.