Diameter Capital Partners and Darsana Capital Partners have acquired a substantial portion of US$1 billion in debt tied to Elon Musk’s acquisition of X, according to sources familiar with the situation.

The loans, arranged by a Morgan Stanley-led consortium, were offered to select investors to gauge demand and pricing ahead of a broader US$3 billion debt offering.

Neither the banks nor the investment firms involved have commented on the transactions.

This move is part of banks’ efforts to offload portions of the US$13 billion debt from Musk’s 2022 buyout, some of which has since declined in value to around 60 cents on the dollar.

Investment firms such as Pacific Investment Management Co. (PIMCO) and Apollo Global Management Inc. are also exploring interest in the additional debt package, but no deals have been finalized.