Airbnb still raises $ 1 billion in debt


Airbnb CEO Brian Chesky at the New York Times Dealbook event on November 6, 2019.

Credit: Mike Cohen / The New York Times

A week after investing $ 1 billion in fresh capital, Airbnb is still raising $ 1 billion in debt as it seeks to improve its balance sheet to weather the COVID-19 crisis, according to people familiar with the matter.

Fidelity, T. Rowe Price and Blackrock are participating in the funding, as well as Oaktree Capital, Apollo Global Management, Benefit Street Partners and Owl Rock Capital, said the people, who declined to be named because the deal did not not made public. . Bloomberg was the first to report on the funding cycle.

Airbnb is one of several companies linked to the tourism industry that have seen their activity disappear in the past six weeks amid the rapid spread of the coronavirus. The company reimburses customers who have had to cancel their trips and has set aside $ 250 million to reimburse hosts.

Airbnb is paying about 9% interest on the new debt, people have said. This is slightly lower than the interest rate on the debt portion of last week’s announced funding cycle, which was a mix of debt and equity. For the debt part of this financing, Airbnb pays around 11.5%. Silver Lake is participating again after also putting money into the previous deal.

The new cycle comes with a reduced rate as it is the first lien, which means that investors will be paid first in the event of default. Previous funding was a second lien, so investors would be paid later. The share of the deal last week valued Airbnb at $ 18 billion, almost half of what the company was worth in 2017.

Morgan Stanley and Goldman Sachs advised the transaction.

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