A regulatory filing shows that Elon Musk's SpaceX obtained a $20 billion bridge loan last month to refinance a significant portion of its existing debt ahead of a major initial public offering in the United States.
The loan was provided by a consortium whose identity was not disclosed. Under the loan terms, if SpaceX fails to repay the facility through other financing channels within six months after its IPO, it may be required to use the IPO proceeds to settle the debt.
SpaceX is expected to go public this summer, potentially becoming the largest IPO in history. The rocket and artificial intelligence giant is projected to reach a valuation of around $1.75 trillion.
This information was included in the S-1 document filed by SpaceX. The S-1 is a registration statement submitted to the U.S. Securities and Exchange Commission when a company prepares to go public, disclosing business and financial details to potential investors.
The bridge loan replaces five existing debt facilities, including two term loans linked to Musk's X social media platform and three borrowings from the billionaire's artificial intelligence firm xAI. The filing added that, as of March 2, the new loan helped reduce SpaceX's total debt to $20.07 billion, with an expected increase to $22.05 billion by the end of 2024.
Bridge loans are a common financing tool with relatively short terms, often refinanced later with new, longer-term debt. SpaceX's bridge loan has an 18-month term and can be extended twice, each time for three months.
Companies often opt for bridge loans around major events such as mergers or large acquisitions, particularly when the move is expected to benefit the company and ultimately lower its borrowing costs.
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