TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Airbnb raises $1 billion in debt from Oaktree, BlackRock

  • Gillian Tan, Eric Newcomer and Davide Scigliuzzo

    Bloomberg

San Francisco, United States   /   Wed, April 15, 2020   /   09:59 am
Airbnb raises $1 billion in debt from Oaktree, BlackRock Airbnb Inc. was warned by the European Union to expect a regulatory clampdown unless its terms and conditions and the way it presents holiday-home prices comply with EU standards. (Shutterstock/Kaspars Grinvalds)

Airbnb raised $1 billion in debt, according to people with knowledge of the matter, as the travel company braces for an extended fallout from the coronavirus.

The new, first-lien debt comes from a group of more than 20 investors, including Silver Lake, the largest participant, as well as BlackRock, Eaton Vance, Fidelity Investments and T. Rowe Price Group, according to people with knowledge of the matter. Other participants include Apollo Global Management, Benefit Street Partners, Blackstone Group, Glade Brook Capital Partners, Oaktree Capital and Owl Rock Capital, the people said.

The deal builds on last week’s investment of the same size from Silver Lake and Sixth Street Partners, which is also participating in the new debt, said the people, who asked not to be identified because the deal isn’t public. Representatives for the companies involved either declined to comment or didn’t immediately respond to requests.

The five-year loan 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, the people said. Terms tightened from a rate of 8 percentage points over Libor and a discount of 96 cents on the dollar, the person said. Investor demand for the deal exceeded $2.5 billion.

The new debt is senior to the San Francisco-based company’s borrowings from Silver Lake and Sixth Street that it unveiled earlier this month, which is composed of second-lien debt and equity securities. The equity valued the company at $18 billion, a fraction of its $31 billion peak. The new deal doesn’t include warrants or other equity components, a person familiar with the deal said.

The additional funds give Airbnb extra financial cushion as prospects dim for an initial public offering this year. It could help the company weather the economic crisis brought on by the coronavirus pandemic without going public, and could also allow the company to make acquisitions, a strategy it has been weighing, people with knowledge of the matter told Bloomberg last month.