xAI plans early repayment of $3 billion in bonds as Musk eyes SpaceX’s IPO

xAI plans to redeem $3 billion in high-yield bonds early, a move that would significantly reduce debt ahead of a potential public listing of SpaceX, according to a Bloomberg report.

The company plans to redeem the bonds at about 117 cents on the dollar, a notable premium considering the securities were issued in June with a structure that indicates they will remain outstanding for at least two years.

The bonds, which have a 12.5 percent coupon, were sold at par and have risen in recent weeks. Price data shows they rose about three points to almost 117 cents on Monday.

For early repayment, issuers are generally required to compensate investors through make-whole provisions or penalty payments that cover expected interest over a specified period. The unusual timing underlines efforts to streamline the balance sheet.

Musk recently combined xAI with SpaceX, creating a broader company that has about $18 billion in debt, including liabilities related to his buyout of

Elon Musk is preparing to take his SpaceX company public. Bloomberg reported last week that the Texas-based company could confidentially file for an initial public offering as soon as this month, potentially valuing it above $1.75 trillion and putting it on track for a June listing.

In June, xAI improved pricing conditions to attract investors for a broader $5 billion debt package, which included the $3 billion bond tranche that is now being terminated and two additional $1 billion loans.

One bond was issued alongside the bonds at par, while the other was priced 7.25 percentage points above the benchmark at a discounted price of 96 cents on the dollar.