Morgan Stanley Prepares to Launch Remaining $5.5B TL for Musk’s X Acquisition; Pricing at SOFR+650-665 Bps, 95 OID

Reporting: Katherine Schwartz, Michael Haley, Geoff Burrows

Morgan Stanley is preparing to launch the remaining $5.5 billion term loan tranche of the roughly $13 billion financing package backing Elon Musk’s 2022 purchase of social media platform X, fka Twitter, according to sources.

X’s 2029 $5.5 billion term loan is expected to launch this week, with pricing coming in at SOFR+650 bps-665 bps, 95 OID. The launch of the remainder of the term loan was sped up after investors expressed growing interest in X’s deal, according to sources.

X’s offering is part of a $6.5 billion term loan financing Musk’s $44 billion buyout of the social media platform. Last week, Octus reported that Morgan Stanley sold a $1 billion floating-rate loan, part of the $6.5 billion term loan, with pricing at about a 12% to 13% yield, according to sources.

As part of the roughly $13 billion in debt financing for X’s deal, there is a $6 billion bridge loan that is expected to convert into senior and junior bonds, sources noted last week. One source noted that $1 billion of X’s debt had been privately sold in senior bonds, with 90-95 OID. They added that if Morgan Stanley is able to fully syndicate the $6.5 billion term loan, the bank may plan to keep the remainder of the bridge loan for now.

Additionally, market participants close to X’s loan said they do not expect any document changes to the deal.

Musk completed the deal to buy Twitter at his original offer price of $54.20 a share, valuing the company at $44 billion in 2022. After the take-private, Musk fired top executives, laid off 75% of Twitter’s staff and made changes to the company’s content moderation, verification and political advertising policies. Though now a private company, the estimated valuation of X has fallen dramatically since Musk’s purchase, decreasing the value of its loans.

X’s capital structure immediately following the buyout in 2022 is below:

Morgan Stanley, Bank of America and Barclays are among the many bookrunners on X’s deal looking to offload the billions of debt they have held since Musk completed his acquisition in 2022.

Morgan Stanley and X did not respond to a request for comment.