WeWork is in talks with banks to secure a $2.75 billion credit line ahead of its planned IPO. JPMorgan would lead the potential financing, according to Bloomberg.
Be smart: This is a common move for startups readying to go public as they often reward the banks who provide the credit line with significant roles (large fees) in their IPO. Lenders are even sometimes willing to offer better financing terms in return.
Burning through cash: Bloomberg’s Jeffrey Langbaum: “WeWork needs access to cash to secure, design and lease office space to sustain robust revenue growth… The company had $6 billion in cash as of early 2019 after burning through $2.3 billion in 2018.”
Flashback: WeWork secured a $650 million revolver led by JPMorgan in 2014 that expires next year. The co-working giant’s junk-rated bonds closed at $92.96 yesterday, a decline from a peak of $99.63 earlier this month.