Sabre will swap $150 million 4% notes due 2025 for notes due 2026

By Marisa Wong

Los Angeles, March 4 – Sabre Corp. announced that, together with wholly owned subsidiaries Sabre Holdings Corp. and Sabre GLBL Inc., it has entered into privately negotiated exchange agreements with a limited number of existing holders, who are qualified institutional buyers under Rule 144A and institutional accredited investors, of Sabre GLBL’s outstanding 4% exchangeable senior notes due 2025.

Under the exchange agreements, Sabre GLBL will exchange $150 million aggregate principal amount of the existing notes for $150 million aggregate principal amount of new exchangeable senior notes due 2026 and an aggregate of about $32.6 million in cash, according to a Monday press release.

The cash payment represents the premium paid for the existing notes in excess of par value and accrued interest on the existing notes.

Upon completion of the exchange, the aggregate principal amount of the existing notes outstanding will be $183 million, and the aggregate principal amount of the new notes outstanding will be $150 million.

Sabre and Sabre GLBL will not receive any cash proceeds from the issuance of the new notes under the exchange.

The exchange is expected to settle on or about March 19, subject to customary closing conditions.

New notes

The new notes will accrue interest payable semiannually beginning on Aug. 1. The interest rate will be determined based on the volume-weighted average price of Sabre’s common stock over a measurement period following execution of the exchange agreements, but in no event will the coupon be less than 4% or greater than 7.5%.

The new notes will mature on Aug. 1, 2026.

Before Feb. 1, 2026, holders will have the right to exchange their new notes only upon the occurrence of certain events. From and after Feb. 1, 2026, holders may exchange their new notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

Sabre GLBL will have the right to elect to settle exchanges in cash, stock or a combination of cash and stock at its election.

Upon exchange of any new note, the exchange value will be determined over a period of multiple trading days. The initial exchange rate is 222.2222 shares per $1,000 principal amount, which represents an initial exchange price of about $4.50 per share. The initial exchange price represents a premium of about 72.4% over the last reported sale price of $2.61 per share of common stock on March 1. The exchange rate and exchange price will be subject to adjustment upon the occurrence of certain events.

The new notes will not be callable prior to the maturity date.

If a fundamental change occurs, then holders of the new notes may require Sabre GLBL to repurchase their new notes for cash. The repurchase price will be equal to the principal amount of the new notes to be repurchased, plus accrued interest, if any.

In connection with the exchange, Sabre expects that holders of existing notes that participate in the exchange will seek to sell shares of common stock or enter into various derivative positions with respect to shares of common stock to establish hedge positions with respect to the new notes. This activity could decrease (or reduce the size of any increase in) the market price of common shares, the existing notes or the new notes at that time, the company noted.

Based in Southlake, Tex., Sabre is a software and technology company for the travel industry.

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