NEW YORK, Jan 24 (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 ( MS ) 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 ( MS ) and others, such as Bank of America ( BAC )

and Barclays ( JJCTF ), lent Musk money to complete his $44

billion buyout of X, then known as Twitter, in 2022.

Morgan Stanley ( MS ), Bank of America ( BAC ) and Barclays ( JJCTF ) 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.