WeWork Inc. said it’s offering to swap two sets of bonds worth about $1.2 billion for new debt and stock as part of a sweeping restructuring effort.
(Bloomberg) — WeWork Inc. said it’s offering to swap two sets of bonds worth about $1.2 billion for new debt and stock as part of a sweeping restructuring effort.
The company is seeking to exchange its 7.875% notes due 2025 and 5% bonds due 2025, according to a statement Monday. Terms for investors depend on if they agree to participate in a new debt financing for the company.
Bondholders who agree to purchase the company’s new 15% first-lien pay-in-kind notes due 2027 can swap their holdings for a mix of new second-lien notes and stock, or a larger stock-only allocation. Those that don’t buy the PIK notes can get new third-lien notes and stock, or all stock.
The new first-lien PIK notes pay 7% in cash and 8% in-kind. The second-lien and third-lien bonds also have PIK portions, and have 11% and 12% coupons, respectively. All mature in 2027.
Holders of a majority of the old notes have already agreed to the exchange. The early deadline for the deal, which offers the best terms for investors, is 5 p.m. on April 14 in New York.
WeWork, the struggling co-working company, struck a deal last month to shave off about $1.5 billion of debt on a net basis and receive more than $1 billion of capital commitments. The bonds being targeted for the exchange last traded at less than 56 cents on the dollar, according to Trace.
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