Wework Credit Agreement

The WeWork Credit Agreement: What You Need to Know

WeWork has been all over the news lately, with the company`s IPO debacle and subsequent rescue by SoftBank. But what about the WeWork credit agreement? This document, which outlines the terms of the company`s indebtedness, is just as important as the IPO or SoftBank bailout.

What is the WeWork Credit Agreement?

The WeWork Credit Agreement is a legal document that outlines the terms of the debt that WeWork owes to its creditors. The credit agreement is essentially a loan, with WeWork borrowing money from banks and other financial institutions. The credit agreement sets out the terms of the loan, including the amount borrowed, the interest rate, and the repayment schedule.

Why is the WeWork Credit Agreement Important?

The WeWork Credit Agreement is important because it represents a significant amount of debt for the company. As of June 30, 2019, WeWork had outstanding debt of $1.5 billion, according to its IPO prospectus. The credit agreement is also important because it sets out the terms of the debt, which can have a significant impact on the company`s financial health.

What are the Terms of the WeWork Credit Agreement?

The terms of the WeWork Credit Agreement are complex and detailed, but some of the key terms include:

– Interest rate: The interest rate on WeWork`s credit agreement is tied to LIBOR, which is the London Interbank Offered Rate. As of June 30, 2019, the interest rate was 3.56%.

– Maturity: The credit agreement has a maturity date of April 30, 2025.

– Repayment schedule: WeWork is required to make quarterly payments on the loan, with the first payment due on December 31, 2019.

– Covenants: The credit agreement includes a number of covenants, which are essentially promises that WeWork has made to its creditors. For example, WeWork has promised to maintain certain financial ratios and to provide certain financial information to its creditors on a regular basis.

What are the Risks Associated with the WeWork Credit Agreement?

There are several risks associated with the WeWork Credit Agreement. One risk is that WeWork may not be able to meet its debt obligations, which could lead to default and potentially bankruptcy. Another risk is that the interest rate on the credit agreement could increase, which would increase WeWork`s debt service costs.

Conclusion

The WeWork Credit Agreement is an important legal document that outlines the terms of WeWork`s indebtedness. The credit agreement represents a significant amount of debt for the company and sets out the terms of the loan, including the interest rate, repayment schedule, and covenants. While there are risks associated with the credit agreement, it is an important tool that allows WeWork to finance its growth and expansion.