xAI to Redeem $3B High-Yield Bonds Early as Musk Prepares SpaceX IPO

xAI plans to repay $3 billion of high-yield bonds early, redeeming the notes at roughly 117 cents on the dollar, according to a Bloomberg report. The bonds, issued in June with a 12.5% coupon, were sold at par and have rallied recently to about 117. Early repayment will likely involve make-whole or penalty payments to compensate investors for lost interest. The move appears aimed at slimming the combined balance sheet after Elon Musk folded xAI into SpaceX; the broader business now carries about $18 billion in debt, including obligations from Musk’s buyout of X. Bankers are working on financing strategies to reduce heavy interest costs. The action comes as SpaceX may confidentially file for an IPO as soon as this month with potential valuation reports above $1.75 trillion and a possible June listing. In June, xAI had adjusted terms to attract investors for a $5 billion debt package that included the retiring $3 billion tranche plus two $1 billion loans (one issued at par, the other priced at a 7.25 percentage-point spread and sold at 96 cents). Key points for traders: bond prices jumped to ~117 cents, the bonds carry a 12.5% coupon, and the early redemption signals active debt restructuring ahead of a potential mega IPO for SpaceX — developments that could affect credit spreads, risk-on sentiment, and related equities.