NEW YORK (Reuters) -Wall Street banks are getting ready to sell up to $3 billion of debt holdings in X, the social-media platform controlled by Elon Musk, two people with knowledge of the matter said on Friday.

Morgan Stanley bankers have contacted investors ahead of a planned sale next week, the sources said.

Banks expect to get 90 to 95 cents on the dollar, according to the Wall Street Journal, which first reported preparations for the sale.

Musk denied the Journal report as "false," posting on X that the newspaper was "lying."

The Journal cited a January email to X staff in which Musk said finances remained problematic but pointing to the growing power and influence the company had.

Musk said in his X post that he had "sent no such email."

Morgan Stanley and others, such as Bank of America and Barclays, lent Musk money to complete his $44 billion buyout of X, then known as Twitter, in 2022.

Morgan Stanley, Bank of America and Barclays did not immediately respond to requests for comment.

Banks typically sell such loans to investors soon after a deal is done, but lenders have faced difficulties in offloading the debt in the case of X.

Musk's sweeping changes to the platform, including laying off many people who had worked to moderate content, and one of his posts on X, scared away advertisers and hit revenues. That reduced the value of the debt, as the risk of default increased.

Reuters reported in November that Musk's political ascendancy and proximity to President Donald Trump had banks pondering over the improved prospects of the social media platform, helping them in selling the debt without having to take a massive loss on the deal.

Attempts to sell the debt in late 2022 attracted bids which would have seen banks taking as much as a 20% loss on the face value of the debt, sources said at the time.

Other banks in the consortium that helped finance the deal include Mitsubishi UFJ BNP Paribas, Mizuho, and Societe Generale.