Ilon Musk to pay off $17.5 billion in debt ahead of SpaceX's historic IPO
The billionaire did not take up the task of clearing debts by chance: experts call this step a “general cleaning” of the balance sheet before the expected launch of the united holding under the auspices of SpaceX, notes Bloomberg.
How the billionaire’s debts appeared
The bulk of the amount – about $12.5 billion – is debt raised by Musk to buy Twitter in 2022. Another $5 billion comes from the obligations of AI startup xAI, resulting from the issuance of bonds and credit lines in the summer of 2025 to purchase computing power.
Morgan Stanley Bank, which serves as lead financial advisor and holds a significant portion of the debt, has already begun notifying creditors of plans for a full settlement. According to Bloomberg, the most aggressive element of the deal will be a $3 billion buyback of xAI’s high-yield bonds at a premium: investors will receive 117 cents per dollar of face value, which will compensate them for the early termination of coupon payments.
The hasty repayment of debt is taking place against the backdrop of preparation SpaceX to the initial public offering of shares, which may become the largest in world history. In February 2026, SpaceX absorbed xAI (which already owned Platform X at the time), forming a giant with a valuation of $1.25 trillion.
PitchBook analysts note that a clean balance sheet without costly loans is critical to attracting institutional investors. A confidential IPO filing is expected to be made with the SEC as early as March, and trading itself could begin in June 2026 at a target valuation of more than $1.75 trillion.
The mystery of the source of capital
The main question for the market remains the origin of the funds for such a massive payout. Neither Morgan Stanley nor representatives of Musk’s companies have disclosed the source of the $17.5 billion in cash. In January 2026, xAI raised $20 billion in a Series E round, making this capital the most likely resource for closing old liabilities.
The market reacted to the news with a rise in xAI bond prices, which jumped 3 points to reach a target of 117 cents. For Wall Street, the signal is clear: Musk is moving his assets from the “aggressive survival” mode to the phase of dominating the public market.
