- 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 its announcement last week that it had raised $1 billion in debt and equity from Silver Lake and Sixth Street Partners.
- Airbnb will pay 7.5% interest plus LIBOR on the five-year loan as part of Tuesday’s deal, which will involve no equity or warrants.
- Airbnb’s business has been hit hard by coronavirus lockdowns, and the funds could help the company as it tries to survive the pandemic.
- Visit Business Insider’s homepage for more stories.
Airbnb is hoping to raise $1 billion in debt, the company’s second infusion 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, which first reported news of the deal, reported that Apollo Global Management, Benefit Street Partners, Glade Brook Capital Partners, Oaktree Capital and Owl Rock Capital are also involved.
Reports of the deal come just a week after Airbnb announced it had raised an initial $1 billion in debt and equity from Silver Lake and Sixth Street Partners in a deal that valued the company at $18 billion, according to the The Wall Street Journal. That’s a drop of 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 won’t include equity or warrants, was more than $2.5 billion, according to the person familiar with the matter.
Airbnb has been hit hard by the coronavirus pandemic, which has all but halted travel globally, and was reportedly losing money even before the pandemic, threatening to delay the company’s plans to go public this year.
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