By William Gullotti
Buffalo, N.Y., July 21 – WeWork Inc. wholly owned subsidiary WeWork Cos. LLC and its wholly owned subsidiary, WW Co-Obligor Inc., entered into a supplemental indenture on July 17 to issue $175 million of 15% first-lien senior secured PIK notes due 2027 in two parts, according to an 8-K filing with the Securities and Exchange Commission.
$116.67 million of series II notes were sold to SoftBank Vision Fund II-2 LP, an affiliate of SoftBank Group Corp.
$58.33 million of series III notes were sold to an unnamed third-party investor.
According to the filing, the notes follow terms that are “substantially similar” to the series I notes issued under the original May 5 indenture.
The series II and series III notes are likewise guaranteed on a first-lien senior secured basis by each of the issuer’s wholly owned restricted subsidiaries that guarantee its obligations under the senior letter-of-credit facility and junior letter-of-credit facility under the credit agreement dated Dec. 27, 2019.
The 15% interest rate will be paid semiannually in arrears, with 7% payable in cash and 8% payable as PIK interest.
The issuer may call the notes from either series, in whole or in part, prior to Nov. 1, 2024 with a make-whole call at Treasuries plus 50 basis points. There is also a 35% equity clawback prior to Nov. 1, 2024 at 115. WeWork may also exercise a par call, in whole or in part, on or after Nov. 1, 2024.
The notes are also putable at 101 upon a change of control.
As with the initial $525 million first-lien senior secured PIK notes from May, U.S. Bank Trust Co., NA is trustee and collateral agent.
WeWork is a New York-based provider of shared workspaces and related business services.
| Issuers: | WeWork Cos. LLC and WW Co-Obligor Inc.
|
| Amount: | $175 million
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| Issue: | First-lien senior secured PIK notes
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| Maturity: | Aug. 15, 2027
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| Coupon: | 15%, with 7% payable in cash and 8% payable in PIK interest
|
| Call options: | Make-whole at Treasuries plus 50 bps until Nov. 1, 2024, par call thereafter
|
| Equity clawback: | Up to 35% of the outstanding principal at 115, prior to Nov. 1, 2024
|
| Change-of-control put: | At 101
|
| Trustee: | U.S. Bank Trust Co., NA
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| Pricing date: | July 17
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| Series II
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| Amount: | $116,666,667
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| Issue: | First-lien senior secured PIK notes, series II
|
| Purchaser: | SoftBank Vision Fund II-2 LP
|
|
|
| Series III
|
| Amount: | $58,333,333
|
| Issue: | First-lien senior secured PIK notes, series III
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