Sabre Announces Exchange of Approximately $43.6 Million of Existing Senior Secured Notes due in 2025 for Additional 8.625% Senior Secured Notes due 2027
- None.
- None.
Insights
The exchange of different tranches of senior secured notes by Sabre GLBL, a wholly owned subsidiary of Sabre Corporation, indicates a strategic debt restructuring effort. By consolidating its 2025 notes into the newly issued 2027 notes, Sabre GLBL may be aiming to streamline its debt profile and extend its debt maturities, which can alleviate short-term liquidity pressures and potentially improve its credit ratings. The exchange also suggests that Sabre GLBL is taking advantage of investor demand for higher-yielding debt, given the higher interest rate of the 2027 notes compared to one tranche of the existing notes.
From a financial perspective, the lack of cash proceeds from the issuance indicates that this transaction is purely a debt-for-debt swap, which is often used to manage and optimize a company's capital structure. The addition of cash to cover accrued interest is a standard practice in such exchanges. Investors and analysts should monitor Sabre GLBL's future interest expenses and debt service capabilities, as the higher interest-bearing 2027 notes could impact the company's financial statements, particularly its income statement and cash flow statements.
The legal intricacies of this transaction are evident in the use of Rule 144A under the Securities Act, which allows for the sale of privately placed securities to qualified institutional buyers. This facilitates faster and more efficient transactions without the need for public registration. The exchange agreements with institutional accredited investors and non-U.S. persons indicate Sabre GLBL's compliance with international and domestic regulations governing securities.
Additionally, the fact that the 2027 notes are secured by a first-priority security interest in substantially all assets of Sabre GLBL and its guarantors underscores the strong creditor protection measures in place. This could be appealing to risk-averse investors and might provide Sabre GLBL with more favorable borrowing terms in the future. The joint and several guarantees by Sabre Holdings Corporation and Sabre GLBL's restricted subsidiaries further strengthen the creditworthiness of the 2027 notes.
The issuance of the additional 2027 notes by Sabre GLBL reflects broader market trends where companies with substantial debt are looking to refinance at potentially lower rates or push out maturities to manage their debt obligations effectively. The interest rate of 8.625% on the 2027 notes is indicative of the current credit market conditions and investor appetite for higher yields amid a potentially rising interest rate environment.
Investors should consider the overall industry landscape, as companies like Sabre may face increased competition and market volatility, which could affect their ability to service debt. Furthermore, the redemption option starting in 2025 at a premium suggests that Sabre GLBL is confident in its future cash flows, allowing it to potentially retire debt ahead of schedule if conditions are favorable.
The 2027 Notes issued in the Exchange constitute an additional issuance by Sabre GLBL of the 2027 Notes, of which approximately
The 2027 Notes will mature on June 1, 2027 and bear interest at a rate per annum equal to
The 2027 Notes and the guarantees thereof are senior secured indebtedness and rank equal in right of payment with all of the existing and future senior secured indebtedness of Sabre GLBL and the guarantors. The 2027 Notes are jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings Corporation and all of Sabre GLBL's current and future restricted subsidiaries that are borrowers under or guarantee Sabre GLBL's senior secured credit facilities under certain of its existing credit agreements or certain other secured indebtedness. The 2027 Notes and the guarantees thereof are secured, subject to permitted liens, by a first-priority security interest in substantially all present and hereinafter acquired assets of Sabre GLBL and each of the guarantors (other than certain excluded assets).
The 2027 Notes 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.
Perella Weinberg Partners LP served as financial advisor and Davis Polk & Wardwell LLP served as legal counsel to Sabre on this transaction. Latham & Watkins LLP served as legal counsel to Perella Weinberg Partners LP.
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. 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
SABR-F
Contacts:
Media | Investors |
Kristin Hays | Brian Roberts |
View original content to download multimedia:https://www.prnewswire.com/news-releases/sabre-announces-exchange-of-approximately-43-6-million-of-existing-senior-secured-notes-due-in-2025-for-additional-8-625-senior-secured-notes-due-2027--302083782.html
SOURCE Sabre Corporation
FAQ
What was the total amount exchanged by Sabre GLBL Inc. in the transaction?
What is the total outstanding principal amount of the 2027 Notes after the exchange?
When do the 2027 Notes issued in the exchange mature?
What is the interest rate on the 2027 Notes?
Who served as the financial advisor to Sabre on this transaction?
