Banks Move to Unload Billions in X Loans at 90-95 Cents on the Dollar

Wall Street banks are finally preparing to offload billions of dollars in X loans, and they're pricing the debt at 90 to 95 cents on the dollar. That's the takeaway from a new report, confirming that lenders who have been stuck with the paper since the 2022 acquisition are ready to take a loss and move on.

The discount is steep but not catastrophic. For a bank holding $1 billion in face value, selling at 90 cents means a $100 million hit. But the bigger story is what the sale says about the market's view of X: after two years of write-downs and turmoil at the social media platform formerly known as Twitter, the debt is trading at a level that reflects a deeply diminished company, yet one that still has buyers willing to step in.

The debt dates to Elon Musk's $44 billion purchase of Twitter in 2022. Major Wall Street banks committed billions in loans to fund the deal, then struggled to sell that debt to institutional investors as the platform's revenue declined and the market for leveraged loans soured. The result: a multi-billion-dollar albatross on their balance sheets, one that has tied up capital, complicated quarterly earnings, and become a running worry for investors watching the banks' exposure.

Why 90 to 95 cents? In the leveraged loan market, that range signals a real loss for the original lenders but far from a distressed wipeout. Loans trade in a secondary market where prices reflect the borrower's creditworthiness. For X, a company whose valuation has been hotly debated since the takeover, a loan price in the low 90s suggests the banks believe they can find buyers without having to dump the debt at fire-sale levels. It also implies that while the equity value of X may have collapsed, the debt still carries some collateral protection and a promise of interest payments that make it attractive to certain institutional buyers.

For the banks, the sale is a cleanup. Holding the X loans has weighed on their capital positions and forced them to mark the debt down over time. Selling at 90 to 95 cents converts a lingering headache into a realized but manageable loss, and frees up room for new lending. That's why the sale has been anticipated for months, and why its arrival matters beyond just X. It is a test of whether the market for risky, high-yield debt has reopened enough to absorb large blocks of loans that would have been unthinkable to sell during the worst of the credit crunch.

The move also carries a strategic message for other leveraged buyouts. When banks underwrite a deal, they typically plan to syndicate the debt quickly to investors. The X loans became a cautionary tale about what happens when that exit route closes: the banks become unwilling owners of the very debt they helped create. Now, with a sale at a discount, they are signaling that they would rather take a clear, bounded loss than continue carrying an uncertain, open-ended risk.

For X itself, the price tag is another data point in the long-running argument over the company's worth. Musk and his backers have insisted the platform is more valuable than the market implies. But a 90 to 95 cent loan price, while not a death sentence, is a sobering vote from professional credit investors. It suggests that the debt is fundamentally sound enough to trade, but the equity behind it has lost a significant portion of its value. That gap between narrative and market price is exactly what other executives and boards should watch as they assess their own leveraged structures.

For decision-makers, the real lesson is about liquidity and optionality. Banks that hold debt they cannot sell are forced to become owners, with all the concentration risk that comes with it. The X sale, if it goes through, will be a case study in how to exit a bad position without panic. It also sets a benchmark: if loans tied to one of the most high-profile and volatile acquisitions of the decade can trade at 90 cents, then other stuck deals may finally find a clearing price too. That is a signal worth reading closely, whether you are a CFO, a credit investor, or a founder watching the cost of capital shift under your feet.