WeWork closed a new $1.75 billion senior secured letter of credit facility. Goldman Sachs is the administrative agent of the new facility.
Goldman Sachs, Citibank, DBS Bank, Deutsche Bank, Mizuho, Natixis and Société Générale participated in the syndication as joint lead arrangers and joint bookrunners, and other banks continue to look into participation in the facility.
WeWork, which in December entered into the committed facility together with SoftBank Group, is not required to post any cash collateral under the new facility, making available approximately $800 million in working capital that was restricted under previous letter of credit facilities.
“This new letter of credit facility — which offers better terms and frees up significant balance sheet capital — marks the latest milestone in WeWork’s evolution,” said Marcelo Claure, executive chairman of WeWork. “We will continue to improve the company’s financial position, implement our new operating model and pursue disciplined growth on our path to adjusted EBITDA profitability by next year.”
WeWork also entered into a master note purchase agreement in December to formalize SoftBank’s commitment to provide up to $2.2 billion in unsecured debt. This unsecured debt financing, along with SoftBank’s commitment to provide up to $1.1 billion of secured debt financing and SoftBank’s credit support of this new $1.75 billion letter of credit facility, are part of a broader agreement with SoftBank reached last fall to bring significant new funding to the company.
In addition to WeWork’s strengthened financial position and strategic plan, WeWork has made recent leadership changes, with incoming Chief Executive Officer Sandeep Mathrani scheduled to start February 18. Kirthiga Reddy, a technology executive and Partner at SoftBank Investment Advisers, has joined the WeWork board of directors in the designated SoftBank Vision Fund seat formerly occupied by Ron Fisher.
This is part of a planned director refreshment in line with corporate governance best practices. In addition, Mark Schwartz and Steve Langman have voluntarily resigned from the Board of Directors and Lew Frankfurt expects to resign upon completion of the investment transactions agreed to between WeWork and SoftBank, including the previously announced tender offer. WeWork will continue to appoint new directors who add strategic value and diverse perspectives to the Company in the months ahead.
*Includes total WeWork locations (consolidated and IndiaCo)
WeWork provides members with space, community, and services through physical and virtual offerings.