- Home-sharing marketplace company Airbnb has reportedly raised another $1 billion in debt on top of the $1 billion it already recently raised
Home-sharing marketplace company Airbnb has reportedly raised another $1 billion in debt on top of the $1 billion it already recently raised. The $1 billion in debt will be used for continuing to grow and pay bills associated while the company navigates through a halt in travel caused by the COVID-19 pandemic.
Airbnb raised the cash by issuing first-lien debt — which has a priority on the company’s assets in case of default. According to Bloomberg, the funding is coming from a group of over 20 investors including Silver Lake. The other investors also include BlackRock, Eaton Vance, Fidelity Investments, and T. Rowe Price. Some of the other participants also include Apollo Global, Benefit Street Partners, Blackstone Group, Glade Brook Capital Partners, Oaktree Capital, and Owl Rock Capital.
“I deeply appreciate the confidence and trust that so many have shown in our company even as every sector in travel is going through the storm of the pandemic. We know travel will return and rather than merely hunkering down, the support we have received will allow Airbnb to continue moving forward as we invest in our community,” said Airbnb Co-Founder, CEO and Head of Community Brian Chesky in a statement. “All of the actions we have taken over the last several weeks assure that Airbnb will emerge from the storm of the pandemic even stronger, regardless of how long the storm lasts.”
The five-year loan is priced at a spread of 7.5 percentage points over the benchmark London interbank offered rate and at a discount of 97.5 cents on the dollar according to Bloomberg’s sources. And the terms tightened from a rate of 8 percentage points over Libor and a discount of 96 cents on the dollar. This new debt is senior to the company’s borrowing from Silver Lake and Sixth Street announced earlier this month — which is comprised of second-lien debt and equity securities.
