SoftBank seeks to sell $550M of WeWork rescue debt – Bloomberg

  • SoftBank Group (OTCPK:SFTBY) (OTCPK:SFTBF) looks to sell $550M of debt provided to WeWork (NYSE:WE) more than a year ago amid cash shortages, people familiar with the matter told Bloomberg.
  • Meanwhile, the Japanese conglomerate is selling the bonds to institutional investors at 85.6 cents on the dollar, for a 9.875% yield, the people told Bloomberg.
  • Following the catalyst, WeWork’s (WE) 7.875% notes due May 2025 fell to 94 cents on the dollar, the lowest levels seen since March, Bloomberg notes.
  • “SoftBank selling in the mid-80s is not exactly a vote of confidence,” Brandywine Global Investment Management High-Yield Bong Portfolio Manager Bill Zox told Bloomberg.
  • The sale is expected to be completed by Thursday.
  • On the other hand, “facilitating this transaction provides WeWork with the opportunity to diversify its investor base and access to a group of strong institutional investors, a WeWork spokesperson told Bloomberg. Recall on Monday, WeWork (WE) agreed to extend $1.75B in secured credit commitments to February 2024.
  • The notes that SoftBank is selling now were part of the $2.2B of securities if acquired from WeWork (WE) in July of last year, that mature in 2025; the bonds will split into two series, and SoftBank will retain a $1.65B portion, according to a copy of the offering documents seen by Bloomberg.
  • In February, SoftBank neared a $500M settlement with WeWork’s Adam Neumann.
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