Peloton Interactive, Inc. announced on May 30, 2024, the successful completion of a comprehensive refinancing totaling $1.35 billion. This initiative aimed to reduce the company's overall debt burden, extend debt maturities, and achieve more flexible loan terms. The refinancing involved syndicating a new $1 billion five-year term loan facility, raising $350 million through an upsized private offering of convertible senior notes due in 2029, and securing a new $100 million five-year revolving credit facility with JP Morgan and Goldman Sachs.
The company utilized the net proceeds from the new notes and credit facilities, along with existing cash, to strategically repurchase approximately $800 million of its 0.00% convertible senior notes due 2026. This repurchase was executed at a discount, contributing to a reduction in Peloton's total debt. Additionally, the funds were used to refinance its existing term loan and revolving credit facilities and cover associated fees and expenses.
Liz Coddington, Peloton's Chief Financial Officer, highlighted that the refinancing achieved the company's goals of modest deleveraging and extending maturities at a reasonable blended cost of capital. She noted the strong support from new and existing investors, resulting in an oversubscribed offering. This outcome, she stated, underscores the resilience of Peloton's subscription business and positions the company on stronger financial footing for continued profitable growth. The refinancing pushed the company's next major maturity wall out from 2026 to 2029, providing more time for a turnaround.
