Benzinga - by Adam Eckert, Benzinga Staff Writer.
Peloton Interactive Inc (NASDAQ:PTON) shares are trading lower in Monday’s after-hours session after the company global refinancing, including a private notes offering.
What Happened: After the market close on Monday, Peloton said it intends to offer $275 million worth of convertible senior notes due 2029 in a private offering to institutional investors. The company said it will grant the initial purchasers of the notes a 13-day option to purchase up to an additional $41.3 million aggregate principal amount of the notes.
Peloton also plans to enter into a $1 billion five-year term loan facility and a $100 million five-year revolving credit facility.
Peloton will use the net proceeds of the offering and the new credit facilities to repurchase approximately $800 million worth of its 0.00% convertible senior notes due 2026. The company said it will also use proceeds to refinance its existing term loan and revolving credit facilities and pay any related fees and expenses.
The news comes after Peloton announced a CEO transition and headcount reduction at the beginning of the month. Former CEO Barry McCarthy stepped down from his role and is currently acting as a strategic advisor. Karen Boone and Chris Bruzzo are serving as interim co-CEOs.
Pelton also introduced a comprehensive restructuring effort that included a global headcount reduction of approximately 15%, a continued reduction of the company’s retail showroom footprint and a reimagination of its go-to-market approach. The company said at the time that it expected the plan to result in reduced annual run-rate expenses by more than $200 million by the end of its 2025 fiscal year.
As of May 2, Peloton had $794.5 million in unrestricted cash and cash equivalents.
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PTON Price Action: Peloton shares were down 8.4% after hours at $3.58 at the time of publication, per Benzinga Pro.
Photo: courtesy of Peloton.
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