- Airbnb is set to raise $1 billion in debt financing, a source familiar with the matter told Business Insider.
- The deal is Airbnb’s second in two weeks, following an announcement last week that it had lifted $1 billion in debt and equity of Silver Lake and Sixth Street Partners.
- Airbnb will pay 7.5% interest plus LIBOR on the five-year loan under Tuesday’s deal, which will not involve shares or warrants.
- Airbnb’s business has been hit hard by coronavirus lockdownsand the funds could help the company as it tries to survive the pandemic.
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Airbnb hopes to raise $1 billion in debt, the company’s second injection of new capital in just two weeks, a person familiar with the matter told Business Insider on Tuesday.
Airbnb will pay 7.5% interest on the five-year loan, in addition to the London Interbank Offered Rate, at a discount of 97.5 cents on the dollar.
Private equity firm Silver Lake Partners has a major role in the deal, the person told Business Insider, while Bloomberg, who first broke news of the dealsaid Apollo Global Management, Benefit Street Partners, Glade Brook Capital Partners, Oaktree Capital and Owl Rock Capital are also involved.
News of the deal comes just a week after Airbnb announced it had raised $1 billion in debt and equity of Silver Lake and Sixth Street Partners in a deal valuing the company at $18 billion, according to the Wall Street Journal. That’s down nearly 50% since Airbnb’s last private valuation of $31 billion in 2017, according to PitchBook, and less than the $26 billion internal valuation the company reportedly reached last week.
Investor demand for Tuesday’s $1 billion financing deal, which will be debt-only and will not include shares or warrants, was more than $2.5 billion, according to the person close to the file.
Airbnb has been hit hard by the coronavirus pandemicwhich has virtually halted world travel and would have been lose money even before the pandemic, threatening to delay the company plans to go public This year.
