Elon Musk's Lenders Cash In $5.5 Billion On X Loans Amidst Surging Investor Demand

In a remarkable turn of events, a group of banks led by Morgan Stanley has successfully sold $5.5 billion worth of loans tied to Elon Musk's social media platform, X Corp., thanks to surging investor demand. This sale, initially planned at $3 billion, was expanded due to heightened interest from investors, including Pimco and Citadel, who purchased the loans at 97 cents on the dollar (The Wall Street Journal, 2025).

The floating-rate debts carry an interest rate of approximately 11%, a premium even compared to some of Wall Street's riskiest loans. The transaction underscores the renewed investor enthusiasm surrounding X Corp., following Musk's growing influence in Washington and the return of key advertisers, such as Amazon.com Inc. (The Wall Street Journal, 2025).

The loan sale is a significant win for the banks, including Morgan Stanley, Bank of America Corp. (BAC), and Barclays (BCS), which originally extended financing for Musk's $44 billion buyout of X in 2022. The sluggish performance of X and high interest rates had forced them to hold onto the debt far longer than expected. Despite the successful sale, the banks still retain around $6 billion in X-related debt, some of which is considered riskier (The Wall Street Journal, 2025).



The renewed investor interest in X Corp. can be attributed to several factors:

1. Elon Musk's Growing Influence in Washington: Musk's political ascendancy and proximity to President Donald Trump have led to renewed investor enthusiasm surrounding X. This is because Musk's influence in Washington could potentially lead to favorable policies for the company, reducing regulatory risks and increasing its value (Reuters, 2025).
2. Return of Key Advertisers: The return of key advertisers, such as Amazon.com Inc., has stabilized X's financial situation. Advertisers pulling back due to content moderation concerns had previously led to a decline in revenue, but their return has boosted investor confidence (The Wall Street Journal, 2025).
3. Investment from Musk's AI Startup: Musk's artificial intelligence startup, xAI, has injected hundreds of millions of dollars into X. This investment, along with X's 10% stake in xAI, valued at approximately $5 billion, has further bolstered investor confidence in the company's financial prospects (The Wall Street Journal, 2025).
4. Successful Investor Meeting: A recent investor meeting led by Morgan Stanley bankers and X CEO Linda Yaccarino revealed financial documents that showcased the company's improved financial situation. This meeting likely played a role in increasing investor demand for X loans (The Wall Street Journal, 2025).

These factors combined have led to a surge in investor demand for X loans, allowing banks to sell $5.5 billion worth of debt at 97 cents on the dollar, with investors including Pimco and Citadel participating in the sale (The Wall Street Journal, 2025).

The successful sale of these loans is a significant win for the banks involved, as it allows them to reduce their risk exposure, recoup their investment, improve their capital position, enhance their reputation, and potentially generate further sales. However, the remaining $6 billion in X-related debt still poses a risk for the banks, which they may address through hedging, selling in smaller tranches, negotiating with X, diversifying their portfolio, or strengthening their risk management processes.

In conclusion, the successful sale of $5.5 billion in X loans demonstrates the power of investor demand and the potential for renewed confidence in a company's prospects. As Elon Musk continues to shape the future of X Corp., investors and banks alike will be watching closely to see how the platform's financial health evolves.