Musk's xAi increases yield offer on $5 bln debt raise, source says
NEW YORK, June 20 (Reuters) - Elon Musk's xAi is increasing the yield it is offering on a $5 billion debt raise led by Morgan Stanley, a source with knowledge of the matter said on Friday.
xAi is offering to pay 12.5% yield on $3 billion in bonds, said the source who asked for anonymity to disclose non-public information. Previously, sources told Reuters the company had offered a 12% yield.
xAi is also offering 12.5% fixed yield on a $1 billion term loan and set to price a $1 billion term loan B at 725 basis points over the Secured Overnight Financing Rate, known as SOFR. The term loan B is set to be priced at a discount of 96 cents on the dollar, the source said. The initial offering on the securities was 12% on the fixed loan and 700 basis points over the SOFR on the floating rate loan.
Junk-rated bonds paid an average yield to maturity of 7.602%, according to ICE BofA High Yield Index. (.MERH0A0), opens new tab
The deadline for investor commitments was extended from Tuesday to Friday and allocations will be done one day after closing, the source said. If the deal closes on Friday, allocations will happen on Monday.
An increase in the yield offer could mean that investors had probably agreed to buy the debt only for a higher yield. The borrower also has lesser flexibility on pricing when investor demand is modest.
The xAI offering, which was reported on June 2 as Musk and U.S. President Donald Trump traded barbs over social media, did not receive overwhelming interest from high-yield and leveraged loan investors, Reuters reported earlier this week.
Unlike Musk's debt deal when he acquired Twitter, Morgan Stanley did not guarantee how much it would sell or commit its own capital to the deal, in what is called a "best efforts" transaction, according to one person familiar with the terms.
xAi did not immediately respond to a request for comment. Morgan Stanley declined to comment.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Auto Blog
42 minutes ago
- Auto Blog
Honda Launches Killer Accord Hybrid Lease Offer for June
Honda Accord Hybrid lease deal for June The Honda Accord has been a solid competitor in the sedan segment for the past eleven generations, with the newest Hybrid model providing the same reliability and practicality with terrific mpg benefits. If you've been eyeing the Accord Hybrid for a while but needed another reason to sign on the dotted line, Honda's newest lease deal may be that reason. 0:00 / 0:09 Walmart is selling a 'heavy duty' $89 step ladder for $48, and shoppers say it's 'sturdy and secure' Watch More Honda seems to be holding a nationwide lease offer on the Accord Hybrid. We cross-checked Los Angeles, Denver, Miami, New York, and Michigan offers, and residents of all states can get behind the wheel of an Accord FWD Sport Hybrid for $389 per month for 36 months with $3,799 due at signing. All deals have a 10,000-mile annual limit. Owners of any 2010 or newer Honda, Buick, Chevrolet, Chrysler, Dodge, Fiat, Fisker, Ford, GMC, Hyundai, Jeep, Kia, Mazda, Mini, Mitsubishi, Nissan, Polestar, RAM, Rivian, Scion, Subaru, Tesla, Toyota, VinFast, and Volkswagen get the same Accord FWD Sport Hybrid for $359 per month for 36 months with $3,699 due at signing. 2025 Honda Accord Hybrid — Source: Honda What do you get in a 2025 Honda Accord Sport Hybrid? The Sport Hybrid is the base hybrid trim, featuring a 2.0 L I4 engine paired with two electric motors that send 204 hp through an e-CVT. The EPA rates the Sport Hybrid at 46 mpg city, 41 mpg highway, and 44 mpg combined, compared to the gas-powered base LX's 29 mpg city, 37 mpg highway, and 32 mpg combined. The hybrid also makes 12 extra hp over the LX. Snazzy touches on the Accord Sport Hybrid include 19-inch alloy wheels, a trunk spoiler, a power sunroof, an 8-speaker, 180-watt audio system, power driver seat, dual-zone automatic climate control, a leather-wrapped steering wheel, as well as Apple CarPlay and Android Auto compatibility on its 12.3-inch infotainment touchscreen. Given that it's the same car size-wise, the same 16.7 cu ft of cargo space carries over. 2025 Honda Accord Hybrid Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Final thoughts Lease offers can vary based on location and specific vehicle configuration (trim level, options, etc.) and are subject to credit approval. Advertised payments typically exclude taxes, title, registration, and other potential fees. To take advantage of this offer or to get a precise quote based on your needs (including an official $0 down option), visit the official Honda website here. 2023 Honda Accord Hybrid — Source: Honda *Disclaimer: This article is provided for informational purposes only. The information presented herein is based on manufacturer-provided lease offer information, which is subject to frequent change and may vary based on location, creditworthiness, and other factors. We are not a party to any lease agreements and assume no liability for the terms, conditions, availability, or accuracy of any lease offers mentioned. All terms, including but not limited to pricing, mileage allowances, and residual values, require direct verification with an authorized local OEM dealership. This article does not constitute financial advice or an endorsement of any particular lease or vehicle. About the Author Gabriel Ionica View Profile
Reuters
2 hours ago
- Reuters
South Korea's chief trade envoy plans US visit June 22-27
SEOUL, June 21 (Reuters) - South Korea's trade minister Yeo Han-koo will visit the United States from June 22 to 27, the trade ministry said on Saturday. The visit will include discussions with U.S. Trade Representative Jamieson Greer and the third round of bilateral technical discussions, a ministry official told Reuters. Further details about the meetings were not disclosed. South Korea, which is currently facing a 10% blanket tariff and a 25% country-specific duty temporarily paused for 90 days, agreed with the U.S. during initial trade negotiations in late April to craft a trade deal reducing tariffs by July 8. Asia's fourth-largest economy unexpectedly contracted in the first quarter amid U.S. President Donald Trump's sweeping tariffs and domestic political unrest following former President Yoon Suk Yeol's martial law decree in December.
Daily Mail
2 hours ago
- Daily Mail
Soda fans claim they have discovered Coca-Cola's latest bizarre cost-cutting trick
Aggravated Coca-Cola fans are claiming the key to company cost-cutting is less carbonation. Nearly 100 Reddit users claimed they noticed an unacceptable difference in the soda's 'fizziness', which they say is a bizarre cost-cutting trick. 'I had a Coke for the first time in a few years, and yeah there was barely any carbonation in it,' a soda fan wrote in a Reddit post. 'I figured I had a bad bottle, but I could see them skimping out on something like that now.' Customers believe Pepsi is performing the same cost-cutting hack now that it's been knocked out of America's top three sodas. 'I have found the same issue with Pepsi. Mainly with the bottles, which sometimes almost seem completely flat, but the cans are not as fizzy either,' a commenter claimed. 'I complained to Pepsi Co a number of times, and tried drinks from various bottling locations. At this point I fully believe it is just a cost cutting measure.' Longtime enemies Coke and Pepsi have been competing for market share for decades, and frequently produce similar beverage flavors and marketing campaigns. Commenters claimed the affected soda was served at restaurant chains like McDonald's and Taco Bell. But Coca-Cola and Pepsi were not Reddit users' only targets in the fizzy diss. Other drinks that didn't meet fans' carbonation standards included Mountain Dew and Orange Celsius. 'The carbonation process is cheap, if they want to skimp, they would skimp on the syrup?,' a Reddit user commented. 'It amazes me the length these big companies will go to cut costs,' another person responded. 'You already produce one of the cheapest, easiest to make products in the not enough?.' Others targeted all corporate companies with their rage. 'At this point, if it is a corporation, their motto is F the current customer/employee to squeeze quarterly profits,' a commenter wrote. Coca-Cola and Pepsi have been bitter rivals in the soda wars for years A Reddit post flooded with comments from soda fans that are unsatisfied with their drinks This year's soda battle exploded when Pepsi copied Coca-Cola's famous 'Share a Coke' campaign with an advertisement dubbed 'Share a Pepsi.' Coke's 'Share a Coke' special launched in the US in 2014 when the company released bottles with popular names on them. Pepsi's latest campaign is all-new and includes food names on its bottles like 'burgers', 'pizza', and 'tacos.' The campaign began around the same time a Coca-Cola spokesperson confirmed fan-favorite Diet Cherry Coke would return to stores five years after discontinuation. The upcoming relaunch is strikingly similar to Dr. Pepper's Diet Dr. Pepper Cherry, a popular product offered by the soda brand since 2009. Both companies were the participants of highly publicized drink swaps. Costco opted to switch from Pepsi to Coca-Cola in food courts, while Subway ditched Coca-Cola for Pepsi.
