Airbnb secures US$1 billion loan

New York

AIRBNB, whose home rental business is suffering as the novel coronavirus pandemic freezes global travel, has secured a new US$1 billion loan just days after closing a US$1 billion debt deal, the company said on Tuesday.

Parties to the new loan deal included private equity firms Silver Lake, Apollo Global Management, Sixth Street Partners, Oaktree Capital Management and Owl Rock, according to several sources with knowledge of the discussions.

Silver Lake, one of the two investors in the debt deal days ago, is "one of the biggest players" in this new deal, said one of the sources.

The terms of the new deal are first lien debt, meaning these creditors would be paid first if Airbnb were to default.

The loan is for five years, with an interest rate of 750 basis points over the London Inter-bank Offered Rate (Libor) benchmark, they said, adding that it was sold at a slight discount to the loan's par value which would see investors earn a rate of around 12 per cent.

Last week's US$1 billion bond deal with Silver Lake and Sixth Street included warrants for the two private equity firms that can be exercised at an US$18 billion valuation.

That figure is below the US$26 billion Airbnb cited as an internal valuation in early March and well below the US$31 billion valuation it gained in its 2017 Series F fundraising round.

Airbnb said in September 2019 that it planned to list its shares this year. It has not commented publicly whether the ongoing turmoil in the travel industry will impact those plans. REUTERS