Wall Street banks are poised to sell up to $3 billion in loans next week, sources told Reuters.
By Tatiana Bowser and Saeed Azhar
NEW YORK (Reuters) – Wall Street banks are preparing to sell up to $3 billion in debt in X, the social media platform controlled by Elon Musk, two people familiar with the matter said on Friday.
Morgan Stanley (NYSE: ) bankers have spoken to investors ahead of a planned sale next week, the sources said.
Expect to get 90 to 95 cents on the dollar, according to the Wall Street Journal, which first reported the sale.
Musk called the Journal’s report “false,” posting it on X, which the paper dismissed as “false.”
The Journal cited a January email to X employees in which Musk said the finances were in trouble but pointed to his growing power and influence at the company.
“I never sent such an email,” Musk said in X’s post.
Morgan Stanley and others such as Bank of America and so on Barclay (LON: ) , has loaned Musk money to complete its $44 billion acquisition of X, also known as Twitter, in 2022.
Morgan Stanley, Bank of America and Barclays did not immediately respond to requests for comment.
Banks usually sell such loans to investors after the deal is done, but lenders in X’s case had problems getting the debt down.
Musk’s changes to the platform, layoffs of many people who worked on content management, and one of his posts on X have scared off advertisers and taken a hit. That reduced the value of the debt, as the risk of default increased.
Reuters reported in November that Musk’s political ascendancy and closeness to President Donald Trump helped banks sell the debt without taking huge losses on the deal as banks pondered the improved prospects of the social media platform.
In the year An attempt to sell the debt by the end of 2022 attracted bids that saw banks take losses of up to 20% on the face of the debt, sources said at the time.
Other banks that helped finance the deal included Mitsubishi UFJ (NYSE: ), BNP Paribas (OTC: ), Mizuho (NYSE: ) and Societe Generale (OTC: )