Airbnb in advanced talks about new $1 billion loan: sources

NEW YORK/BOSTON/SAN FRANCISCO (Reuters) – Airbnb is in advanced talks for a new $1 billion loan just days after the U.S. home rental company closed a $1 billion debt deal with private equity firms, people familiar with the matter said on Tuesday.

Airbnb, whose business is suffering as the coronavirus pandemic freezes global travel, is in discussions with investors such as private equity firms Apollo Global Management, Silver Lake, Sixth Street Partners, Oaktree Capital Management and Owl Rock, the sources said.

The terms being discussed are first lien debt, meaning these creditors would be paid first if Airbnb were to default, the sources added. Airbnb is discussing a five-year loan which would have an interest rate of 750 basis points over the Libor benchmark, and is being sold to investors at a slight discount to the loan’s par value which would see them earn a rate of around 12%.

A final agreement between the company and the lenders could come as early as Wednesday, the sources said, cautioning that the plans and structure of the deal are still subject to change.

The sources requested anonymity as the matter is private. Airbnb, Apollo, Oaktree, Silver Lake and Sixth Street declined to comment. Owl Rock did not immediately respond to requests for comment.

The loan is the latest move by Airbnb to bolster its finances, after the company last week announced a $1 billion bond deal with Silver Lake and Sixth Street.

That deal included warrants for Silver Lake and Sixth Street that can be exercised at an $18 billion valuation, below the $26 billion Airbnb was valued in early March in its internal valuation and well below the $31 billion Airbnb was worth in its 2017 Series F fundraising round.

The company’s falling valuation underscored the impact of the coronavirus outbreak on its business.

Airbnb said in September it planned to list its shares in 2020. It has not commented publicly whether the turmoil in the travel industry will impact those plans.

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