The offer of return on the XAI of Musk on an increase in debt of $ 5 billion, says source
By Tatiana Bautzer
New York (Reuters) -lon Musk’s XAI increases the performance it offers on an increase in debt of $ 5 billion led by Morgan Stanley, a source that is aware of the case, said on Friday.
XAI proposes to pay a return of 12.5% on $ 3 billion bonds, said the source that asked anonymity to disclose non -public information. Previously, sources told Reuters that the company had offered a 12%return.
XAI also offers a fixed yield of 12.5% on a long -term loan of $ 1 billion and at the price of a long -term loan of $ 1 billion B at 725 basic points on the funding rate overnight, known as SFR. The B -term loan should be assessed at a 96 cents discount on the dollar, the source said. The initial offer on titles was 12% on the fixed loan and 700 base points on the SFR on the floating rate loan.
The sick obligations paid an average yield to a deadline of 7.602%, according to the high performance index Ice Bofa.
The deadline for investor commitments has been extended from Tuesday to Friday and allowances will be carried out one day after the closure, said the source. If the agreement ends on Friday, the allowances will occur on Monday.
An increase in the return offer could mean that investors had probably agreed to buy debt only for higher return. The borrower also has less flexibility on prices when investors’ demand is modest.
The XAI offer, which was reported on June 2 while Musk and US President Donald Trump exchanged beards on social networks, did not receive any overwhelming interest in high -efficiency and lever -effects, Reuters reported earlier this week.
Unlike the musk debt agreement when he acquired Twitter, Morgan Stanley does not guarantee how much he would sell or engage his own capital in the agreement, in what is called a “best efforts” transaction, according to a person familiar with the conditions.
XAI did not immediately respond to a request for comments. Morgan Stanley refused to comment.
(Report by Tatiana Bautzer; additional report by Matt Tracy; edition by Mark Porter, Alexandra Hudson)
