Wall Street Banks Sell Final Slug of Elon Musk's X Debt

The loans sat on the books for two years until Donald Trump's election rapidly changed the company's fortunes

- Alexander Saeedy

A group of Wall Street's biggest banks have finally dug themselves out of a $13 billion quagmire that Elon Musk created.

On Monday, banks sold the final slug of the debt they lent for Musk's takeover of Twitter in 2022, according to people familiar with the matter. The $1.2 billion of loans sold at 98 cents on the dollar.

The sale was a long time coming. In April 2022, Morgan Stanley, Bank of America and five other banks agreed to lend the money to help Musk buy Twitter. The plan was to divvy up some $13 billion in debt, sell it to investors and earn millions in fees.

By the time the deal closed, the markets had tanked and investors were wary of betting on Twitter's debt. The unloved loans sat on banks' balance sheets for more than two years while the financial prospects of the newly christened X looked dimmer and dimmer. By the summer of 2024, the X deal was considered the worst buyout banks had agreed to finance since the 2008 financial crisis.

Everything turned with the election of Donald Trump as president and the rise of Musk as a crucial Trump ally, catalyzing a frenzy among investors to get a slice of Musk Inc. Advertisers such as Amazon.com started coming back to the platform, helping Musk to raise more capital for X. Then Musk merged the social-media platform with his budding artificial-intelligence startup, xAI, forming a venture with a combined value of $113 billion, Musk said.

Banks have sold some $11 billion of X loans to investors since early February.