Summary
Expedia Group, Inc. (EXPE) filed an 8-K on August 6, 2020, to report on the entry into a new Foreign Credit Facility and an amendment to its existing credit facility. The primary development is the establishment of an $855 million unsecured Foreign Credit Facility, maturing on May 31, 2023, with JPMorgan Chase Bank, N.A. This new facility was established concurrently with a $855 million reduction in commitments under the company's Existing Credit Facility, and a $772 million prepayment of outstanding debt under that facility. This refinancing activity suggests Expedia Group was proactively managing its liquidity and debt structure during a period of significant uncertainty in the travel industry due to the COVID-19 pandemic. While the new facility is unsecured, it is guaranteed by the Company and certain subsidiaries. The terms and conditions, including interest rates and covenants, are largely similar to the Existing Credit Facility, with some adjustments to accommodate the new structure and borrower. Investors should view this as a strategic move to ensure adequate funding and flexibility.
Key Highlights
- 1Expedia Group entered into a new $855 million unsecured Foreign Credit Facility on August 5, 2020.
- 2The new Foreign Credit Facility matures on May 31, 2023.
- 3The company simultaneously reduced commitments under its Existing Credit Facility by $855 million.
- 4Expedia Group prepaid $772 million of indebtedness under the Existing Credit Facility.
- 5The Foreign Credit Facility is guaranteed by the Company and certain subsidiaries.
- 6Interest rates on the new facility are variable, dependent on index rates, margins, and credit ratings.
- 7The new facility's covenants and terms are substantially similar to the Existing Credit Facility, with some modifications.