8-KMaterial AgreementsFinancial EventsExhibits & Filings

Expedia Group, Inc. 8-K Report, Material Agreement (Jul 15, 2020)

Filed July 15, 2020For Securities:EXPE

Summary

Expedia Group, Inc. (EXPE) filed an 8-K on July 15, 2020, to report on the completion of a significant private placement of senior unsecured notes. The company successfully raised approximately $1.238 billion in net proceeds from the issuance of $500 million in 3.600% senior unsecured notes due December 2023 and $750 million in 4.625% senior unsecured notes due August 2027. These proceeds are primarily earmarked for the redemption of outstanding Series A Preferred Stock after May 5, 2021, when the redemption premium is scheduled to decrease. However, Expedia retains the flexibility to use these funds for other general corporate purposes, including debt repayment, depending on evolving business and liquidity conditions. The issuance involved subsidiary guarantors and is subject to customary covenants and events of default.

Key Highlights

  • 1Expedia Group, Inc. completed a private placement of $1.25 billion in senior unsecured notes ($500M due 2023 at 3.600% and $750M due 2027 at 4.625%).
  • 2Net proceeds from the offering amounted to approximately $1.238 billion after expenses.
  • 3The primary intended use of proceeds is to redeem Series A Preferred Stock after May 5, 2021, to take advantage of a reduced redemption premium.
  • 4Expedia has the flexibility to use proceeds for other general corporate purposes, including other debt redemptions, based on business and liquidity conditions.
  • 5The notes are unsecured and unsubordinated obligations of Expedia, with full and unconditional guarantees from subsidiary guarantors.
  • 6The issuance includes registration rights agreements requiring Expedia to file an exchange offer or shelf registration statement within 365 days, with penalties for registration defaults.
  • 7Customary covenants and events of default are included in the indentures governing the notes.

Frequently Asked Questions

The primary stated purpose is to redeem Expedia's outstanding Series A Preferred Stock after May 5, 2021. This timing is strategic to benefit from a decrease in the redemption premium associated with the preferred stock.

Expedia raised approximately $1.238 billion in net proceeds from issuing $500 million of 3.600% senior unsecured notes due December 2023 and $750 million of 4.625% senior unsecured notes due August 2027.

The notes are senior unsecured and unsubordinated obligations of Expedia. They are fully and unconditionally guaranteed by Expedia's domestic subsidiary guarantors, which rank equally with other unsecured and unsubordinated obligations.

Expedia has entered into registration rights agreements requiring it to file an exchange offer or shelf registration statement within 365 days. Failure to do so (a 'Registration Default') will result in the payment of additional interest of 0.25% per annum on the applicable notes until the default is cured.