Wall Street banks have finally shed the debt tied to Elon Musk’s 2022 buyout of the social media platform now known as X, marking the end of a significant financial burden.
On Monday, a group of major banks, led by Morgan Stanley (MS) and including Bank of America (BAC), sold the remaining $1.2 billion in loans associated with Musk’s acquisition. These loans were sold to investors for approximately $0.98 on the dollar, according to a source familiar with the transaction. The Wall Street Journal was the first to report on the final sale of the debt.
Musk’s $44 Billion Twitter Deal Led to Debt Struggles
In 2022, Musk secured roughly $13 billion in financing for his $44 billion purchase of Twitter, which he later rebranded as X. The financing package included a $500 million revolving credit facility. However, as X faced challenges, the value of these loans dropped significantly, forcing the banks to carry them on their books for longer than anticipated.
This prolonged debt holding posed a major issue for the banks, as it placed a strain on their regulatory capital requirements, thereby limiting their ability to finance other buyout deals. As the loans lost value, the banks were eager to offload them, albeit at a loss.
Efforts to Find Buyers for Musk’s Debt
In January 2025, the group of banks began exploring the possibility of selling off portions of the debt initially provided to Musk. Their hope was that the outlook for X would improve due to Musk’s close relationship with President Trump. Additionally, banks were hesitant to lose Musk, the world’s richest man, as a client, especially given his ownership of other high-profile companies, including SpaceX, which has an estimated valuation of $387 billion.
Following this, the banks made significant progress in offloading the debt. In January, a $1 billion portion of the loans was sold for around $0.95 on the dollar. This was followed by another sale in February, where a $5.5 billion portion was sold at $0.98 on the dollar. Later that month, the banks offloaded an even larger portion of $4.7 billion at par.
xAI Merger Boosts Sale Efforts
The banks’ efforts were further supported by Musk’s announcement in late March that his artificial intelligence company, xAI, would acquire X Corp, the parent company of X, in an all-stock transaction. Musk valued the combined companies at $80 billion, which provided a more optimistic outlook for the platform’s future.
Steady Interest Income Amidst Losses
During the two and a half years that the banks held onto the X debt, they did receive a consistent stream of interest payments, though the exact amount remains undisclosed. Bloomberg estimated that the collective interest income generated from the loans could total in the billions.
With this final sale, the banks have now closed the chapter on their involvement with Musk’s social media acquisition, signaling the end of a long financial struggle.
