Peloton Announces Major Refinancing Plan
Krissy Vann | Host, All Things Fitness and Wellness
Peloton Interactive, Inc. has announced a significant refinancing plan. The company will offer $275 million in convertible notes due 2029 and secure new credit facilities, including a $1 billion five-year loan and a $100 million five-year revolving credit line.
Peloton will use the money raised, along with its own cash, to buy back about $800 million of its current zero-interest notes due in 2026, refinance existing loans, and cover related costs. The new loans and buybacks are not dependent on each other, except that the new loans require buying back at least $800 million of the existing notes.
These new notes will be unsecured and will pay interest twice a year. They can be converted into cash, Peloton stock, or a combination of both, depending on Peloton's choice. Details like the interest rate and conversion terms will be set when the notes are priced.
The notes will only be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. They are not registered under U.S. securities laws and cannot be sold in the U.S. unless an exemption applies.
Peloton emphasized, "This announcement is neither an offer to sell nor a solicitation of an offer to buy any of the notes or shares of Class A common stock potentially issuable upon conversion of the notes and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful."
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