xAI is planning to repay $3 billion of high yield bonds early in a move that would significantly reduce debt ahead of a potential public listing of SpaceX, according to a Bloomberg report.
The company intends to redeem the bonds at roughly 117 cents on the dollar, a notable premium given the securities were issued in June with a structure indicating they would remain outstanding for at least two years.
The bonds, which carry a 12.5 percent coupon, were sold at par and have rallied in recent weeks. Pricing data shows they climbed about three points Monday to nearly 117 cents.
Early repayment typically requires issuers to compensate investors through make-whole provisions or penalty payments that cover expected interest over a defined period. The unusual timing underscores efforts to streamline the balance sheet.
Musk recently combined xAI with SpaceX, forming a broader business that carries about $18 billion in debt, including obligations tied to his buyout of X. Bankers are said to be working on a financing strategy aimed at reducing heavy interest costs accumulated in recent years.
Elon Musk is preparing to take his SpaceX company public. Bloomberg reported last week that the Texas-based firm could confidentially file for an initial public offering as soon as this month, potentially valuing it above $1.75 trillion and keeping it on track for a June listing.
In June, xAI enhanced pricing terms to attract investors for a broader $5 billion debt package that included the $3 billion bond tranche now being retired and two additional $1 billion loans.
One loan was issued at par alongside the bonds, while the other priced at 7.25 percentage points over the benchmark with a discounted price of 96 cents on the dollar.