Sabre Announces Exchange of $150 Million of Existing 4.000% Exchangeable Senior Notes due 2025 for Exchangeable Senior Notes due 2026

Rhea-AI Summary

Sabre Corporation announces privately negotiated exchange agreements with existing holders of exchangeable senior notes, involving $150.0 million in principal amount and $32.6 million in cash.

Insights

Financial Analyst

The exchange of senior notes by Sabre Corporation represents a strategic financial maneuver aimed at optimizing the company's capital structure. By exchanging existing notes due in 2025 for new ones due in 2026, Sabre effectively pushes out its debt maturity, which can provide more flexibility in the short-term. The inclusion of a cash component, which is a premium over the par value, suggests that Sabre is incentivizing note holders for the exchange, which could be interpreted as a move to manage current liquidity concerns or to take advantage of favorable interest rates.

Investors should monitor the company's interest coverage ratio post-exchange to assess the impact on Sabre's ability to meet its financial obligations. Additionally, the transaction's effect on the company's leverage ratio could indicate a shift in financial risk profile. Both metrics are crucial for evaluating the long-term financial health of the company and its potential for growth.

Debt Market Analyst

The privately negotiated nature of the exchange agreements indicates a targeted approach to debt restructuring, which may limit the impact on the broader debt market. However, the exchange could signal to the market Sabre's proactive stance in managing its debt, potentially influencing investor sentiment and the trading behavior of Sabre's securities. The premium paid above par value reflects current market conditions and the company's creditworthiness.

Moreover, the transaction details, including the $32.6 million cash payment, will affect the valuation of the new exchangeable notes. Market participants will likely analyze the implied interest rate and compare it with the existing notes to gauge the attractiveness of the new securities. The response of the debt market to this exchange could serve as an indicator for similar future transactions by Sabre or other firms in the industry.

Market Research Analyst

This financial restructuring may signal to stakeholders Sabre's broader strategic initiatives to manage its debt portfolio. Market research analysis would focus on the implications for Sabre's competitive position within the travel technology industry. By extending the maturity of its debt, Sabre may be aiming to align its financial obligations with its operational cash flows, which could be influenced by industry-specific factors such as travel demand and technology investment cycles.

Understanding the context in which Sabre operates, including the cyclical nature of the travel industry and the competitive landscape, is vital. The company's ability to manage its debt effectively can be a competitive advantage, especially if it leads to improved financial stability and the capacity to invest in innovation. The reaction of the market to this news could also reflect broader industry trends and investor confidence in the sector.

SOUTHLAKE, Texas, March 4, 2024 /PRNewswire/ -- Sabre Corporation ("Sabre") today announced that, together with its wholly-owned subsidiaries, Sabre Holdings Corporation and Sabre GLBL Inc. ("Sabre GLBL"), it has entered into privately negotiated exchange agreements (the "Exchange Agreements") with a limited number of existing holders, who are qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and institutional accredited investors, of Sabre GLBL's outstanding 4.000% exchangeable senior notes due 2025 (the "Existing Exchangeable Notes"). Pursuant to the Exchange Agreements, Sabre GLBL will exchange (the "Exchange") $150.0 million in aggregate principal amount of the Existing Exchangeable Notes for (i) $150.0 million in aggregate principal amount of new exchangeable senior notes due 2026 (the "New Exchangeable Notes") and (ii) an aggregate of approximately $32.6 million in cash, with such cash payment representing the premium paid for the Existing Exchangeable Notes in excess of par value and accrued and unpaid interest on the Existing Exchangeable Notes. The Exchange is expected to settle on or about March 19, 2024, subject to customary closing conditions.

Upon completion of the Exchange, the aggregate principal amount of the Existing Exchangeable Notes outstanding will be $183.0 million, and the aggregate principal amount of the New Exchangeable Notes outstanding will be $150.0 million. Sabre and Sabre GLBL will not receive any cash proceeds from the issuance of the New Exchangeable Notes pursuant to the Exchange.

The New Exchangeable Notes will be senior, unsecured obligations of Sabre GLBL, which will be fully and unconditionally guaranteed by Sabre and Sabre Holdings Corporation, the sole direct subsidiary of Sabre and direct parent of Sabre GLBL. The New Exchangeable Notes will accrue interest payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024. The interest rate for the New Exchangeable Notes will be determined based on the volume-weighted average price of Sabre's common stock, $0.01 par value per share (the "Common Stock"), over a measurement period following execution of the Exchange Agreements, but in no event will be less than 4.00% or greater than 7.50%. The New Exchangeable Notes will mature on August 1, 2026 (the "Maturity Date"), unless earlier repurchased or exchanged. Before February 1, 2026, noteholders will have the right to exchange their New Exchangeable Notes only upon the occurrence of certain events. From and after February 1, 2026, noteholders may exchange their New Exchangeable Notes at any time at their election until the close of business on the second scheduled trading day immediately before the Maturity Date. Sabre GLBL will have the right to elect to settle exchanges in cash, shares of Common Stock or in a combination of cash and Common Stock at Sabre GLBL's election. Upon exchange of any New Exchangeable Note, the exchange value will be determined over a period of multiple trading days. The initial exchange rate is 222.2222 shares of Common Stock per $1,000 principal amount of the New Exchangeable Notes, which represents an initial exchange price of approximately $4.50 per share of Common Stock. The initial exchange price represents a premium of approximately 72.4% over the last reported sale price of $2.61 per share of Common Stock on March 1, 2024. The exchange rate and exchange price will be subject to adjustment upon the occurrence of certain events.  The New Exchangeable Notes will not be redeemable prior to the Maturity Date.

If a "Fundamental Change" (as will be defined in the indenture for the New Exchangeable Notes) occurs, then, subject to a limited exception, holders of the New Exchangeable Notes may require Sabre GLBL to repurchase their New Exchangeable Notes for cash. The repurchase price will be equal to the principal amount of the New Exchangeable Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

In connection with the Exchange, Sabre expects that holders of Existing Exchangeable Notes that participate in the Exchange will seek to sell shares of Common Stock and/or enter into various derivative positions with respect to shares of Common Stock to establish hedge positions with respect to the New Exchangeable Notes. This activity could decrease (or reduce the size of any increase in) the market price of shares of Common Stock, the Existing Exchangeable Notes or the New Exchangeable Notes at that time. 

The Exchange and any shares of Common Stock deliverable upon exchange of the New Exchangeable Notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the New Exchangeable Notes and any such shares of Common Stock cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the New Exchangeable Notes or any shares of Common Stock deliverable upon exchange of the New Exchangeable Notes, nor will there be any sale of the New Exchangeable Notes or any such shares of Common Stock, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.

Forward-Looking Statements

This press release includes forward-looking statements about trends, future events, uncertainties and our plans and expectations of what may happen in the future. Any statements that are not historical or current facts are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as "expect," "guidance," "outlook," "trend," "on course," "on track," "target," "potential," "benefit," "goal," "believe," "plan," "confident," "anticipate," "indicate," "trend," "position," "optimistic," "will," "forecast," "continue," "strategy," "estimate," "project," "may," "should," "would," "intend," or the negative of these terms or other comparable terminology, including statements relating to the consummation of the Exchange and the issuance of the New Exchangeable Notes. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. More information about potential risks and uncertainties that could affect our business and results of operations is included in the "Risk Factors" and "Forward-Looking Statements" sections in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 15, 2024, and in our other filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Unless required by law, we undertake no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

About Sabre
Sabre Corporation is a leading software and technology company that powers the global travel industry, serving a wide range of travel companies including airlines, hoteliers, travel agencies and other suppliers. The company provides retailing, distribution and fulfillment solutions that help its customers operate more efficiently, drive revenue and offer personalized traveler experiences. Through its leading travel marketplace, Sabre connects travel suppliers with buyers from around the globe. Headquartered in Southlake, Texas, USA, Sabre serves customers in more than 160 countries around the world.

SABR-F

Contacts:

Media	Investors
Kristin Hays kristin.hays@sabre.com  sabrenews@sabre.com	Brian Roberts brian.roberts@sabre.com sabre.investorrelations@sabre.com

 

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SOURCE Sabre Corporation

FAQ

What type of agreements did Sabre Corporation announce?

Sabre Corporation announced privately negotiated exchange agreements.

Who are the existing holders involved in the agreements?

Existing holders are qualified institutional buyers and institutional accredited investors.

What is the total principal amount involved in the exchange?

The total principal amount involved is $150.0 million.

What is the cash component of the exchange?

Approximately $32.6 million in cash is included in the exchange.

When is the settlement of the exchange expected to occur?

The exchange is expected to settle on or before a specified date.