In a long-awaited move, a consortium of banks led by Morgan Stanley has successfully offloaded $5.5 billion of the $13 billion debt package used to finance Elon Musk’s $44 billion acquisition of Twitter, now rebranded as X.

The sale marks the second attempt by the banks—which include Bank of America, Barclays, Mitsubishi UFJ, BNP Paribas, Mizuho, and Société Générale—to find buyers for the risky loans, following an earlier failed attempt in 2022.

The original financing structure of the deal included a $6.5 billion secured term loan, a $3 billion unsecured loan, another $3 billion in secured loans, and a $500 million revolving credit facility. Typically, banks offload such loans quickly to minimize exposure. However, Musk’s sweeping changes to the platform—including mass layoffs, major shifts in content moderation policies, and the loss of key advertisers—spooked potential buyers, leaving the banks stuck holding the debt for nearly two years.

The first attempt to sell the unsecured portion of the loan in late 2022 ended disastrously. Investors offered to buy in at just 60 cents on the dollar, a steep discount that would have forced the banks to take billions in losses. Rather than accept such a poor valuation, the banks chose to hold onto the debt, betting that market conditions might improve.

A Stronger Deal, But Still a High-Risk Investment

Unlike the previous attempt, this time the banks successfully sold down part of the debt at 97 cents on the dollar, higher than the initial marketing range of 90-95 cents. Investors who purchased the debt will earn a yield of 11%, significantly above traditional corporate bond rates, underlining the high-risk nature of the deal.

Sources cited by Reuters say the renewed interest in the X debt sale is partially driven by expectations that Donald Trump’s potential victory in the November U.S. presidential election could increase engagement on the platform. Musk has aligned himself with Trump and positioned X as a more “free speech-oriented” alternative to mainstream social media, a stance that could attract conservative audiences back to the platform. Some investors see this as a sign that advertising and subscription revenues may eventually recover.

Musk’s AI Bet

Another key selling point was that investors in the loan would gain exposure to X’s stake in xAI, Musk’s artificial intelligence startup. xAI is developing Grok, an AI chatbot integrated into X, which Musk has described as a competitor to OpenAI’s ChatGPT. Some investors saw this as an opportunity to benefit from the rapid growth of artificial intelligence, an industry that has attracted billions in venture capital investment.

However, not all investors were convinced. A fund manager at a large high-yield investment firm who was offered the loan declined to participate, citing concerns that X’s financial struggles remain unresolved. The fund manager noted that X’s debt carries no official credit rating, meaning there is no independent assessment of the platform’s ability to service its debt. This made the investment too risky, even at a discounted price.

Can the Banks Offload the Remaining Debt?

Despite successfully selling a portion of the loan, the banks still hold $7.5 billion in X-related debt. Whether they can unload the remaining amount at favorable terms will depend largely on whether Musk can reverse X’s financial decline. Since acquiring Twitter in 2022, he has aggressively cut costs, but his drastic changes have also scared away advertisers, leading to a significant drop in revenue.

Musk has attempted to pivot X towards a subscription-based model, but adoption has been slow, and recent reports suggest that the company’s financial outlook remains uncertain. If X’s revenues fail to rebound, the remaining debt may still be difficult to sell, leaving banks on the hook for billions in potential losses.

For now, the sale of $5.5 billion in debt is a sign that investor confidence in X is somewhat improving, but the long-term financial health of the platform remains an open question.

Nigeria, please do not do it and take the number of states to 67: “In what appears to be one of the most radical proposals in Nigeria’s political history, the House of Representatives Committee on the Review of the 1999 Constitution has put forward a plan to create 31 additional states, bringing Nigeria’s total to 67 states.”

The Proposed New States Across Nigeria

North-Central:
Benue Ala (from Benue State)
Okun (from Kogi State)
Okura (from Kogi State)
Confluence (from Kogi State)
Apa-Agba (from Benue South Senatorial District)
Apa (from Benue State)
Federal Capital Territory, Abuja (to be recognized as a full-fledged state)

North-East:
Amana (from Adamawa State)
Katagum (from Bauchi State)
Savannah (from Borno State)
Muri (from Taraba State)

North-West:
New Kaduna and Gurara (from Kaduna State)
Tiga (from Kano State)
Kainji (from Kebbi State)
Ghari (from Kano State)

South-East:
Etiti (as the 6th state in the South-East)
Adada (from Enugu State)
Urashi (as the 6th state in the South-East)
Orlu (from the South-East region)
Aba (from the South-East region)

South-South:
Ogoja (from Cross River State)
Warri (from Delta State)
Bori (from Rivers State)
Obolo (from Rivers and Akwa Ibom States)

South-West:
Toru-Ebe (from Delta, Edo, and Ondo States)
Ibadan (from Oyo State)
Lagoon (from Lagos State)
Ijebu (from Ogun State)
Another Lagoon (from Lagos and Ogun States)
Another Ibadan (from Oyo State)
Oke-Ogun and Ife-Ijesha (from Ogun, Oyo, and Osun States)

In my thesis, I do think Nigeria should even convert to 6 states, from the current 36 states. Why? The small states we have now do not have capacity to do anything worthwhile. But at a regional-state level, greater things can happen. Sure, that will reduce the number of governors, aides, etc [the reason that will not fly] but it will help the evolved states to dream bigger projects and get them done.

What we call states now excluding Lagos, Rivers, Akwa Ibom, Delta and maybe two extra, have no capacity for generation-shaping projects because they have no capacity. Then imagine dividing them further! Nigeria should not add more states.

Comment on Feed

Comment: On the contrary, the more States we have, the faster the urbanization and infrastructural development we will have.

My Response: Which infrastructure has Nigeria built in the capitals of Zamfara, Abia, Bayelsa, etc since they were created. Having buildings with exotic cars possibly means “urbanization and infras development” for you. But before that era, states BUILT factories, dams, catalytic projects that required huge sums. Today, states do not have that capacity. They only build markets, junctions and supply kekes. Just name one major project in any state created by Abacha in the last batch to 36 states.

We have local government areas to drive rural development. But that has not happened as your family budget is possibly bigger than most LGAs’

Response #1: I do believe your thesis of faster urbanization and infra development, but if you look at the current prevailing data the states we have today can’t fund themselves, most of them have transitioned into a parasitic kind of relationship with other states and the center.

If we look closely, the HoA that is proposing this move are only thinking about been governors or making their cronies governors and hoping to maintain this current system of governance where the states will survive anyhow.

I am of the opinion like Ndubuisi Ekekwe that if the states are merged into productive units, the tendency to grow faster and develop better will be more.

Response #2: , the more states you have, the more the cost of governance. The more the cost of governance, the less the resources that will be available for development, considering that the current structure already consists of states that are not independently self-sustaining…

Follow the logic.

It is the same logic we employ in Business Process Optimization: elimination of duplicate processes. More states means “duplicating” roles that already exist when there is already low capacity utilisation for such tasks. If you analyse the human resource utilisation of the existing state civil servants and politicians, it would not be out of place to suggest that for every 6 civil servants and politicians today, there should be 1.
Now this brings us back to @Ndubuisi Ekekwe’s suggestion of shrinking the structure to 6 states instead.

Comment: The unification decree of May 1966 promulgated by Aguiyi Ironsi that banned regionalism has destroyed a lot of things.
Prof, where do we go from here?

My Response: That is an easy way of looking at what General Ironsi did. From the thesis of the decree, it was not designed for development, but rather to reverse any sense of regionalization. So, he did put a military style solution towards de-emphasising regions after the coup. So, your thesis when you read the whole context of the decree may not be balanced. As a miliary, he wanted ONE nation, and not a nation of regions. It was not a development playbook, but possibly a unity one after a coup, trying to quench fire.

That said, whatever he did at the fangs of an exploding nation, Nigeria in 1979 had a constitution and could have made changes. Also, when Gen Gowon assumed the position of head of state, he could have reversed whatever decree Gen Ironi put across. Gen Ironsi spent less than 7 months but Gen Gowon ran the show for at least 8 years.

I think the 1979 Constitution is to be blamed and not what the generals did as they were not really focusing on development, but holding the country together.

Nigeria’s House of Representatives Proposes Creation of 31 Additional States

In what appears to be one of the most radical proposals in Nigeria’s political history, the House of Representatives Committee on the Review of the 1999 Constitution has put forward a plan to create 31 additional states, bringing Nigeria’s total to 67 states.

The proposal was presented during plenary on Thursday by Deputy Speaker Benjamin Kalu, who read a letter from the committee detailing the proposed new states. The suggested creations span all six geopolitical zones, with some regions set to gain multiple new states, including Kogi and Benue, which could be split into three separate states each if the proposal is approved.

The Proposed New States Across Nigeria

North-Central:
Benue Ala (from Benue State)
Okun (from Kogi State)
Okura (from Kogi State)
Confluence (from Kogi State)
Apa-Agba (from Benue South Senatorial District)
Apa (from Benue State)
Federal Capital Territory, Abuja (to be recognized as a full-fledged state)

North-East:
Amana (from Adamawa State)
Katagum (from Bauchi State)
Savannah (from Borno State)
Muri (from Taraba State)

North-West:
New Kaduna and Gurara (from Kaduna State)
Tiga (from Kano State)
Kainji (from Kebbi State)
Ghari (from Kano State)

South-East:
Etiti (as the 6th state in the South-East)
Adada (from Enugu State)
Urashi (as the 6th state in the South-East)
Orlu (from the South-East region)
Aba (from the South-East region)

South-South:
Ogoja (from Cross River State)
Warri (from Delta State)
Bori (from Rivers State)
Obolo (from Rivers and Akwa Ibom States)

South-West:
Toru-Ebe (from Delta, Edo, and Ondo States)
Ibadan (from Oyo State)
Lagoon (from Lagos State)
Ijebu (from Ogun State)
Another Lagoon (from Lagos and Ogun States)
Another Ibadan (from Oyo State)
Oke-Ogun and Ife-Ijesha (from Ogun, Oyo, and Osun States)

Unexcited Nigerians See A Scheme for More Political Looting

However, rather than excitement, the proposal has been met with widespread skepticism, as many Nigerians see it as yet another ploy by politicians to expand their empire of looting rather than improve governance.

Given that almost every governor in Nigeria has a corruption case, citizens argue that this will simply create 31 more corrupt politicians with access to public funds.

It is believed that politicians want to create more states because it means more governors, more commissioners, more senators, and more federal allocations that will go straight into their pockets.

For many, the current 36 states and the Federal Capital Territory (FCT) have failed in governance, struggling with unpaid salaries, decaying infrastructure, and poor service delivery.

“Who bewitched Nigeria! When we should be talking about merging the existing states that have proved not viable over time, some not-so-engaged reps members are talking about creating 31 more states in Nigeria,” a social media user noted.

Rather than addressing these issues, lawmakers are more concerned with creating new states, which would come with the burden of setting up new administrative structures, electing new governors, and creating new House of Assembly members. All against the backdrop of the high cost of governance.

“31 more state with each having 3 senators! With the present economic situation in this country, do we have the resources to fund 202 senators at the upper Chamber?” another social media user asked.

Many Nigerians and governance experts have urged lawmakers to focus on fixing Nigeria’s existing governance problems instead of multiplying them. Most Nigerian states are financially dependent on monthly federal allocations, which means they will cease to function without Abuja’s allocations.

Among the many backdrops of the states’ dependence on federal allocations is the inability of many of them to implement the newly-approved N70,000 monthly minimum wage.

Some supporters of the proposal have argued that Nigeria, with over 200 million people, deserves more states. They compare the proposal with the United States, which has 51 states with a population of over 330 million.

However, opponents of the proposal have noted that some of the U.S. states are bigger than Nigeria as a country, yet the government is not seeking to create more from them – even though most American states generate their own revenues, have transparent financial systems, and do not rely on federal handouts to survive.

Will This Proposal Succeed?

The process of creating a new state in Nigeria requires approval from two-thirds of the Senate and House of Representatives, as well as support from the affected state legislatures and local government councils.

Given past attempts to create new states, this proposal is unlikely to succeed—not necessarily because of public opposition, but because it would cause serious political disputes over resource allocation and ethnic balancing.