(TAN): Global home-sharing company Airbnb has secured a new USD 1 billion loan from institutional investors, just over a week after it raised USD 1 billion debt deal from two equity firms.
The new loan reportedly marked the company’s second funding round since the pandemic struck a blow to the global tourism industry.
Airbnb has not disclosed the names of the parties involved nor the terms, although the company is in talks with investors such as private equity firms Apollo Global Management, Silver Lake, Sixth Street Partners, Oaktree Capital Management and Owl Rock, according to Reuters.
Silver Lake, an American private equity firm based in California’s Menlo Park, was one of the two investors in the debt deal, the other one being Sixth Street, a United States-based global multi-asset class investment business.
The San Francisco-based online marketplace said the cash injection will ensure the company can continue investing in Airbnb along with its community of hosts and guests in over 220 countries. Airbnb is one of the several businesses associated with the travel industry that have been hit by the coronavirus outbreak.
“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. 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,” Airbnb Co-Founder, Chief Executive Officer and Head of Community Brian Chesky said.
“All of 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,” he added.
According to reports, the new loan is a five-year first lien debt – in case of a first lien debt the creditors are paid first if the borrower, in this case, Airbnb, defaults. The loan would incur an interest of 750 basis points over the Libor benchmark, and was sold at a slight discount to the loan’s par value owing to which investors would earn a rate of around 12%, reports said.
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