01—Abstract
Summary
Summary of the 8-K filed September 20, 2019. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc. (EXPE) announced the completion of a $1.25 billiona private placement of 3.25% senior unsecured notes due February 2030 on September 19, 2019.
The net proceeds of approximately $1,231 millionb are intended for general corporate purposes, which may include debt repayment, working capital, capital expenditures, acquisitions, dividends, or stock repurchases. These notes rank equally with existing and future unsecured and unsubordinated obligations of Expedia Group and its subsidiary guarantors. Furthermore, Expedia Group entered into a registration rights agreement, obligating them to file a registration statement for an exchange offer of these notes for registered notes within 365 days.
Failure to comply with this agreement will result in a 0.25%c annual increase in interest paid to noteholders. Investors should note the covenants and events of default outlined in the indenture, which could lead to acceleration of debt. The company has the option to redeem the notes before maturity under specific conditions, including a make-whole premium prior to November 2029 and at par thereafter.
02—Key points
Key Highlights
- Completion of a $1.25 billion private placement of 3.25% senior unsecured notes due February 2030.
- Net proceeds of approximately $1,231 million raised from the note issuance.
- Proceeds are earmarked for general corporate purposes, including potential debt reduction, investments, and share buybacks.
- The notes are senior unsecured obligations, ranking equally with other unsecured and unsubordinated debt.
- Subsidiary guarantors provide full and unconditional guarantees for the notes.
- A registration rights agreement mandates Expedia to register these notes within 365 days, with penalties for non-compliance.
- The company can redeem the notes prior to maturity, with a make-whole premium or at par depending on the redemption date.
03—Questions
Frequently Asked Questions
What is the primary purpose of this $1.25 billion debt issuance?
The net proceeds of approximately $1,231 million are intended for general corporate purposes. This broad category may include repaying existing debt, funding working capital needs, capital expenditures, acquisitions, dividends, or stock repurchases.
What is the interest rate and maturity date of these new notes?
The notes carry a fixed interest rate of 3.25% per year, paid semiannually, and they mature on February 15, 2030.
What are the implications of the registration rights agreement?
Expedia Group has agreed to file a registration statement for an exchange offer to swap these privately placed notes for identical registered notes within 365 days. If Expedia fails to meet its obligations under this agreement, it will be required to pay additional interest of 0.25% per annum on the notes until the default is cured.
Under what conditions can Expedia redeem these notes before maturity?
Expedia can redeem all or a portion of the notes at any time before November 15, 2029, by paying a 'make-whole' premium plus accrued interest. On or after November 15, 2029, the company can redeem the notes at par value plus accrued interest.
04—Continue