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WeWork Finds Favor In Debt Market To Tune Of $700M

Posted by Kevin Krueger on May 4, 2018
  • Despite a lack of cash flow and a middling credit rating, WeWork managed to blow out a bond sale to the tune of $702M.
  • The New York-based co-working operator, which hit a valuation of $20B last year, sold seven-year bonds at par with a nearly 8% interest rate, surpassing an initial deal size expected to be $500M
  • This bond sale came despite investor concerns that WeWork has few assets, numerous office lease obligations across the globe, including in some of the priciest real estate markets like New York and San Francisco, and has negative cash flow.
  • The company has a single-B credit rating.
  • WeWork reported that earnings before interest, taxes, depreciation and amortization were more than $190M in the red. But the company reported an EBIDTA of nearly $50M “before growth investments” and a “community adjusted Ebitda” — which excluded general and administrative expenses — of more than $230M.

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