SoftBank sold $550m worth of WeWork debt it had provided the lossmaking property group during its liquidity crisis more than a year ago, agreeing to sell the bonds at a discount to woo investors to the deal.
The Japanese telecoms-to-technology business offloaded the debt, which carried a 5 per cent coupon and matures in July 2025, at roughly 86 cents on the dollar, said two people briefed on the matter. The low price pushed up the yield on the bonds to 9.75 per cent, above the yield on WeWork’s existing debt, which underscored the somewhat lacklustre investor reception for the securities. Yields move inversely to prices.
The $550m debt was part of a $2.2bn rescue package WeWork struck with SoftBank in 2019 and drew down last year, as the provider of shared office space struggled with the fallout from its aborted initial public offering that executives warned had brought it to the brink of bankruptcy. The pandemic also hit its business, like much of the commercial property industry, hard.