WeWork Secures $1.75B Credit Line With Goldman Sachs

The office-sharing company WeWork has secured a $1.75 billion letter of credit with Goldman Sachs Group Inc GS, according to Bloomberg.

What Happened

WeWork said on Tuesday that it had obtained a $1.75 billion letter of credit with Goldman Sachs.

The new $1.75 billion credit line is the first installment of SoftBank Group Corp’s (OTC: SFTBY) $9.5 billion bailout package for WeWork.

The credit would free up around $800 million in reserved cash for WeWork, two people familiar with the matter told Bloomberg.

“We are pleased that WeWork and SoftBank Group Corp. have entered into a commitment letter with Goldman Sachs,” said a spokesperson of WeWork, Erin Clark, in an emailed statement.

Erin said that WeWork wouldn't have to post any cash collateral under the new deal.

“WeWork and Softbank are co-obligors on a senior-secured and unsecured basis, respectively,” added Erin.

What Package

SoftBank announced a $9.5 billion bailout package for the struggling office-sharing company in October after the highly anticipated IPO failed and Adam Neumann resigned as the CEO of the company.

The package included a $3 billion tender offer to purchase privately-held WeWork shares, an early payment of $1.5 billion from SoftBank, and around $5 billion in new debt financing.

What’s Next

WeWork might get access to the funds as early as next month.

“The facility is in the process of syndication and is expected to be available in January,” Erin said.