BTN Europe presents an overview of business travel and MICE predictions for this year
Just one week after raising US$1 billion in debt and equity
securities, Airbnb secured another US$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 a 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 US$31
billion in 2017, but that was lowered to US$26 billion in March. After last
week's loan announcement, its valuation had been reduced further to US$18
For last week's financing, the company is paying more than
10 per cent 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 US$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 US$2.5
Airbnb declined further comment.