Expedia is selling unsecured senior notes which are due in 2023 and 2027. Quick google search helped me vaguely understand: Good: Because its unsecured so not backed by any assets. So if someone's buying notes w/o asset backing they have confidence that company is going to do well by the said due dates. Bad: If company files for bankruptcy then these notes has to be redeemed as a first thing. So my concern is that is done as a debt consolidation so that if Expedia files for bankruptcy investors and leadership don't lose their money??? I am not in Finance and might be totally misreading so would love some help from finance folks. Press release: https://apnews.com/a0adbaad32d044a680989a08cc97683f
Oh fuck it sounds like hunger games inside at Expedia. Is it really getting dark?
Well with social isolation there is no water cooler gossip and no one is dropping bombshell on Blind so 🤷♀️ So I am trying to understand through these financial jargons what the hell is going on!?!
Nothing of concern, issuing notes is a common thing for taxation purposes
Can anyone buy these?
Yesish. They are usually reserved for institutions as there are lot size requirements But im sure if you had 10-15 mil to drop they'd let you in lol
Bonds have priority over stocks in a bankruptcy filing. This means that bond holders are made whole before any money goes to stock holders. Hope this answers your question.
When nothing is left then everyone is equally screwed 😂😂🍿😎
Nothing to see here.
Mostly correct - any secured debt gets paid first and then senior unsecured. This debt offering is pretty low cost debt so it does not appear that Expedia is in desperate straits so i wouldn’t be worried about any bankruptcy for now.
The rates imply a mid single digits chance of going bankrupt per year. So definitely non-zero risk, but also definitely bankruptcy is unlikely
It's important to note that bankruptcy doesn't mean that they will immediately close up shop and liquidate assets. Usually, the courts mandate a reorg and a plan of action going forward.
Issuing senior notes is very common unless the co is in real trouble or very highly levered (like the companies I usually work with) so it doesn't say that much. In bankruptcy, secured debt will be paid before unsecured debt but unsecured debt will be paid before equity (stockholders). Companies will generally try to have a significant amount of their debt unsecured.
Sounds like they are just borrowing more cheaply to pay off more expensive debt. Kind of like a refinancing. Getting rid of 9.5pct debt (or equity preferred) and replacing with 3.6 or 4.65pcy debt
Wth is notes?? I feel dumb ☹️
Don't beat yourself up. Here: https://www.investopedia.com/terms/s/seniornote.asp