A consortium of Wall Street banks has sold the final portion of debt tied to Elon Musk’s $44 billion Twitter acquisition, ending a protracted 2½-year effort to offload the loans.
The banks, including Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), Barclays (LON: BARC), and Mitsubishi UFJ (TYO: 8306), sold $1.2 billion in loans on Monday at 98 cents on the dollar, according to the Wall Street Journal which cited sources familiar with the transaction.
The sale completes the banks’ exit from the $13 billion financing package they provided for Musk’s 2022 purchase of the social media platform now known as X. Financial industry experts noted the loans remained on banks’ books longer than any similar unsold deal since the 2008 financial crisis.
Read: Musk’s Twitter Deal Becomes Worst Merger Loan for Banks Since 2008 Crisis
Donald Trump’s election victory appears to have helped revive plans to sell the debt. Market sentiment toward X improved after the election, sources said, as Musk’s relationship with the new administration bolstered investor confidence.
The merger between X and Musk’s artificial intelligence company, xAI, also improved the debt’s marketability. The banks had previously sold about $11 billion of X loans to investors since February. The combined X and xAI entity is now reportedly seeking to raise approximately $20 billion in new capital, which could value the enterprise significantly higher than before.
Read: xAI Acquires X Amid Controversy Over Valuations
While holding the debt, the banks collected an estimated $1.5 billion annually in interest payments. However, the outstanding loans had tied up capital and weighed on their balance sheets since late 2022. For the banks involved, the sale marks the end of what many considered a risky financial commitment that took far longer than anticipated to resolve.
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