The updated package now comprises $3 billion in bonds carrying a yield of 12.5%, a $1 billion fixed-rate term loan also at 12.5% interest, alongside a $1 billion term loan B priced at 7.25 percentage points above the benchmark rate, with a discount of 96 cents on the dollar, as reported by a knowledgeable source.
The updated package now comprises $3 billion in bonds carrying a yield of 12.5%, a $1 billion fixed-rate term loan also at 12.5% interest, alongside a $1 billion term loan B priced at 7.25 percentage points above the benchmark rate, with a discount of 96 cents on the dollar, as reported by a knowledgeable source. Initially, each component had lower pricing, and the term loan B featured a smaller discount.
Certain investors anticipated that the firm would need to raise debt yields to finalize the deal.
Launched earlier this month, the offering faced challenges due to Musk’s conflict with US President Donald Trump, alongside investor apprehensions regarding xAI’s financial stability. To address these concerns, the firm opted to raise an additional $4.3 billion in equity and modify some terms within the debt agreements, as previously noted by Bloomberg.
Originally, commitments were set for Tuesday; however, Morgan Stanley extended the timeline. Representatives from xAI and the bank have not yet replied to requests for comments.
