Elon Musk's xAI to repay $3 billion debt early, Bloomberg News reports

March 2 (Reuters) - Elon Musk's xAI plans to repay $3 billion of high-yield bonds early, Bloomberg News reported ‌on Monday, citing people with knowledge of the matter.

When ‌a company pays back a loan ahead of schedule, it usually has ​to pay a penalty to investors, plus the interest the lenders were counting on making over the previously agreed period.

The notes jumped about three points on Monday to about $1.17 on $1, ‌the report said, citing ⁠Trace pricing data. The securities were sold in June 2025 with a structure that indicated the ⁠debt was expected to remain outstanding for at least two years.

Morgan Stanley led a $5 billion debt package for xAI last ​year, consisting ​of high-yield bonds and loans ​designed to fuel the ‌company's aggressive expansion into artificial intelligence.

In February, SpaceX acquired the artificial intelligence startup in a record-setting deal that valued xAI at $250 billion, giving the rocket maker greater flexibility to streamline xAI's capital structure.

SpaceX is preparing a blockbuster public listing later ‌this year that could value ​it at over $1.5 trillion.

With the combined ​business holding a significant ​amount of debt, bankers have been working on ‌a financing plan that could ​trim some of ​the heavy-interest costs that the companies have worked up in recent years, the Bloomberg report said.

XAI and Morgan ​Stanley did not ‌immediately respond to requests for comment. Reuters could not ​independently verify the report.

(Reporting by Anhata Rooprai in ​Bengaluru; Editing by Alan Barona)