01—Abstract
Summary
Summary of the 8-K filed February 16, 2021. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc. (EXPE) announced on February 16, 2021, a significant capital restructuring initiative through multiple concurrent offerings and a tender offer.
The company is launching an offering of senior unsecured notes and an $825 milliona offering of convertible senior notes, with an option for an additional $100 million. These offerings are intended to fund a cash tender offer for up to $950 million of its 6.250% Senior Notes due 2025. In conjunction with these offerings, Expedia is also conditionally redeeming all outstanding 7.000% Senior Notes due 2025, originally issued in May 2020.
The redemption is contingent upon receiving sufficient net proceeds from the new note offerings to cover the redemption price. This series of transactions suggests Expedia is actively managing its debt structure, likely to lower interest expenses, extend maturity profiles, and improve its financial flexibility during a challenging economic period.
02—Key points
Key Highlights
- Expedia Group is undertaking a multi-pronged debt management strategy involving new note issuances and a tender offer.
- The company plans to issue Senior Unsecured Notes and $825 million of Convertible Senior Notes (with a potential for an additional $100 million).
- A cash tender offer is being launched to repurchase up to $950 million of its 6.250% Senior Notes due 2025.
- Expedia has conditionally initiated a redemption of its entire outstanding $750 million of 7.000% Senior Notes due 2025.
- The completion of the tender offer and redemption is contingent on the successful net proceeds from the new note offerings.
- These actions indicate a strategic move to refinance existing debt, potentially at more favorable terms or to optimize the company's capital structure.
03—Questions
Frequently Asked Questions
Why is Expedia Group issuing new debt and simultaneously making a tender offer and redemption?
Expedia Group is likely looking to refinance its existing debt. By issuing new senior unsecured and convertible notes, they aim to potentially secure lower interest rates, extend their debt maturity profile, and improve overall financial flexibility. The proceeds from the new offerings are earmarked to fund the repurchase of older, potentially higher-interest debt through the tender offer and the redemption of another note series.
What is the total amount of debt Expedia Group is looking to raise and potentially retire?
Expedia is offering $825 million in convertible senior notes, with an option to purchase an additional $100 million, totaling up to $925 million. The tender offer is for up to $950 million of 6.250% Senior Notes due 2025. Additionally, they are redeeming all outstanding 7.000% Senior Notes due 2025, which had an original principal amount of $750 million. The exact amount retired will depend on the success of the tender offer and the redemption conditions being met.
What are the conditions for the tender offer and redemption to be completed?
Both the tender offer and the redemption are conditioned on Expedia Group receiving aggregate net proceeds from the Senior Notes Offering and/or the Convertible Notes Offering. These proceeds must be sufficient to cover the Maximum Amount of the tender offer ($950 million) plus the Redemption Price for the 7.000% Notes, as well as any associated fees and expenses. Certain other customary conditions described in the Offer to Purchase must also be satisfied.
Are the new Senior Notes and Convertible Notes being offered publicly or privately?
Both the Senior Notes Offering and the Convertible Notes Offering are being conducted as private placements. They are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S.
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