8-KMaterial AgreementsFinancial EventsExhibits & Filings

Expedia Group, Inc. 8-K Report, Material Agreement (Aug 10, 2010)

Filed August 10, 2010For Securities:EXPE

Summary

Expedia, Inc. (EXPE) filed a Form 8-K on August 10, 2010, reporting the entry into a material definitive agreement related to its offering of $750 million in 5.95% Senior Notes due 2020. This offering, conducted under Rule 144A and Regulation S, provides Expedia with significant capital, with the notes maturing in ten years and carrying a fixed interest rate. The notes are senior unsecured obligations, guaranteed by certain domestic subsidiaries, and rank equally with existing unsubordinated debt. Key investor considerations include the potential for early redemption at a make-whole premium and a change of control provision that allows noteholders to request repurchase at 101% of par. The company has also entered into a Registration Rights Agreement, obligating it to facilitate the exchange of these privately placed notes for freely transferable registered notes or file shelf registration statements for resales, with penalties for non-compliance. This filing indicates a strategic move to secure long-term financing and manage its capital structure.

Key Highlights

  • 1Expedia issued $750 million in 5.95% Senior Notes due 2020.
  • 2The notes are senior unsecured obligations, guaranteed by certain domestic subsidiaries.
  • 3Interest is payable semi-annually at 5.95% per annum, commencing February 15, 2011.
  • 4The company has the option to redeem the notes early at a specified make-whole premium.
  • 5A change of control provision allows noteholders to demand repurchase at 101% of par.
  • 6A Registration Rights Agreement mandates Expedia to register the notes for resale or exchange, with potential for additional interest payments if obligations are not met.

Frequently Asked Questions

This 8-K filing is to report Expedia's entry into a material definitive agreement, specifically an indenture for the issuance of $750 million in 5.95% Senior Notes due 2020. This signifies a significant financing event for the company.

The notes mature on August 15, 2020, accrue interest at 5.95% per annum, payable semi-annually. They are senior unsecured obligations of Expedia and are guaranteed by certain domestic subsidiaries. They rank equally with existing unsubordinated debt.

In the event of a change of control triggering event, noteholders have the right to require Expedia to repurchase their notes at 101% of the principal amount, plus accrued interest. This provides a level of protection against significant corporate changes.

The Registration Rights Agreement is crucial because the notes were initially offered under Rule 144A and Regulation S, meaning they are restricted and not freely tradable. Expedia is obligated to use commercially reasonable efforts to register these notes for exchange into freely transferable notes or to file shelf registration statements for their resale. Failure to meet these obligations could result in the company paying additional interest to noteholders.