SoftBank hasย sold $550 million ofย WeWorkย debtย that was given to the coworking firm as part of a $2.2 billion rescue package during the summer of 2020.ย
The Japanese conglomerate offloaded around a quarter of the debt package, which carried a 5% coupon and will mature in July of 2025 at 86 cents on the dollar.ย
The price brought the yield bonds to 9.75%, which is above the yield onย WeWorkโsย current debt.ย
โThe commitment from a broad set of investors indicates a continued support forย WeWorkโsย long-term vision and an ongoing belief in the success of the business,โ the company said in a statement.โฏย
This sale puts pressure on the coworking firmโs other debts. For instance, the bond maturing in 2025 with a coupon of 7.875% fell from 98 cents on the dollar to 95 cents over the past month.ย
Credit ratings agency Fitch gave the bonds a C minus, which is one level above default. However, Fitch believes thatย WeWorkย has enough cash to continue operating.ย
โHowever, a high degree of uncertainty remains surrounding the office market environment, Covid-19 and exogenous shocks including the evolving Omicron coronavirus variant,โย saidย Kevinย McNei, an analyst at Fitch. โWeWorkย would require additional liquidity sources if the office market remains depressed for an elongated period.โย
