Fitness equipment maker Peloton looks to refinance debt amid sagging demand

By Thomson Reuters May 20, 2024 | 3:45 PM

(Reuters) -Peloton Interactive said on Monday it was looking to refinance its debt, as the fitness equipment maker seeks to regain its footing amid falling sales due to uncertain demand.

The company said it will sell $275 million of convertible senior notes due 2029 in a private offering.

Convertible notes – bonds that can turn into shares at pre-agreed prices – usually pay a lower rate of interest than typical bonds and can ease the debt burden on a company.

Peloton has not determined the interest it will pay on the notes, but has decided that the payments would be made semi-annually, it said.

The company has also entered into a $1 billion five-year term loan facility and a $100 million five-year revolving credit, it added.

Proceeds would be used to repurchase about $800 million of convertible senior notes due 2026 and to refinance its existing term loan, the company said. Peloton shares fell 4% after the bell.

Earlier this month, Peloton CEO Barry McCarthy, who was tasked in early 2022 to stem the slide in sales from the pandemic highs, quit as the company announced job cuts to reduce costs after posting weak results.

A number of private equity firms have been considering a buyout of the company, according to a report earlier this month.

(Reporting by Kannaki Deka and Niket Nishant in Bengaluru; Editing by Shailesh Kuber)