Bloomberg is reporting that Peloton has hired JP Morgan Chase & Co in order to try to raise around $850 million.
This $850 million would be used to refinance existing debt – like the $1 billion in cash Peloton had raised in 2021.
Peloton recently discussed on its earning call how they were aware some of their existing debt was maturing – and specifically mentioned how they might be working to refinance some of their debt.
Now that JP Morgan Chase has been hired, they have begun the process of reaching out to potential investors who may be interested in the sale. Although those discussions with investors are said to be informal at this point, syndications of the loan are expected to officially launch next Monday.
Bloomberg’s report says that the margin for the loan might be at a rate of “6.5 percentage points over the Secured Overnight Financing Rate”, although that is subject to change.
The report included a comment from Peloton, which said:
A representative for Peloton said the company is making progress on its refinancing strategy in close collaboration with its lead banks and financial advisor and continues “to be encouraged by the support and inbound interest we’ve received.”
Earlier in March, Bloomberg had reported that Citigroup was exploring options to refinance some of Peloton’s debt – although a Peloton spokesman at the time had said “the bank was not representing the company.” There was no such denial from Peloton that JP Morgan & Chase was not representing Peloton.
In Peloton’s most recent earnings call, Peloton announced another restructuring effort – which saw Barry McCarthy leave at Peloton CEO and 400 employees laid off as part of an effort to reduce expenses by around $200 million yearly.
You can see the full report from Bloomberg here.
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