Just one week after raising $1 billion in debt and equity securities, Airbnb secured another $1 billion on Tuesday in a term loan from institutional investors, the company announced in a statement. Airbnb disclosed no further details about the deal, but according to Bloomberg, which initially reported the story, more than 20 investors were involved, including Silver Lake, which was an investor in last week's funds, along with BlackRock, Eaton Vance Corp, Fidelity Investments and T. Rowe Price Group.
"I deeply appreciate the confidence and trust that so many have shown in our company even as every sector in travel is going through the storm of the pandemic," said cofounder, CEO and head of community Brian Chesky in the statement. "We know travel will return and rather than merely hunkering down, the support we have received will allow Airbnb to continue moving forward as we invest in our community. All the actions we have taken over the last several weeks assure that Airbnb will emerge from the storm of the pandemic even stronger, regardless of how long the storm lasts."
The need to raise additional funds is a stark turnaround from the company's position in January and shows just how drastically the Covid-19 crisis is affecting the hospitality industry. Airbnb had plans for an IPO this year, but that seems less likely now. The company had been valued at $31 billion in 2017, but that was lowered to $26 billion in March. After last week's loan announcement, its valuation had been reduced further to $18 billion.
For the last week's financing, the company is paying more than 10 percent interest plus a benchmark rate known as the London interbank offered rate, or Libor, with the investors receiving free warrants that can be converted into shares based on the company's $18 billion valuation, The Wall Street Journal reported.
This week's loan terms are at five years priced at a spread of 7.5 percentage points over the benchmark Libor and at a discount of 97.5 cents on the dollar, Bloomberg reported. Investor demand for the deal exceeded $2.5 billion.
Airbnb declined further comment.
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