Airbnb is paying an interest rate of 10% on its latest $1 billion funding from Silver Lake and Sixth Street Partners, the Wall Street Journal reported Tuesday.
What Happened
The home-rental startup will have to bear the costs of the "Libor" or "the London Interbank Offered Rate" benchmark rate involved in the financing, in addition, according to the Journal.
Airbnb had announced the investment on Monday and said it included both loan facility and equity.
The Journal's report said the two investors are also getting warrants that can be converted into shares at the company's valuation of $18 billion at the time of the investment.
The investors have also asked the startup to strengthen management and reduce fixed costs, per the Journal's sources, but both venture firms declined the claim in a statement to the Journal.
"There was no such ask or commitment and in fact a major part of our decision to invest was because of our confidence in the leadership of the company," Silver Lake and Sixth Street Partners said.
The novel coronavirus (COVID-19) pandemic has significantly impacted Airbnb and other travel-related companies' businesses. Authorities across the globe have imposed elongated lockdowns to curb the spread of the deadly virus, and the demand for short-term accommodation is drastically reduced.
Airbnb in March asked banks, who had granted it a $1 billion debt facility in 2016, to extend the deadline on the credit line by another year.
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