OYO has raised a TLB funding of USD 660 million from global institutional investors. The offer was oversubscribed by 1.7 times and the company received commitments of close to USD 1 billion from leading institutional investors.
The deal was upsized and increased by 10% to USD 660 million, given the strong interest from investors despite the virus surge. The interest margin rate was also lowered by 25 basis points from the Initial Pricing Guidance. The company will utilise these funds to retire higher-cost debt, strengthen its balance sheet and other business purposes including investment in product technology.
Moody’s and Fitch rated OYO’s senior secured loan B3, and B – offering a stable outlook, respectively, on the back of the company’s sound business model and resilient financial profile with significant potential upside.
Commenting on the financing, Abhishek Gupta, Group Chief Financial Officer, OYO, said “We are delighted by the response to OYO’s maiden TLB capital raise that was oversubscribed by leading global institutional investors. We are thankful for the trust that they have placed in OYO’s mission of creating value for owners and operators of hotels and homes across the globe. This is a testament to the strength and success of OYO’s products at scale, our strong fundamentals and high-value potential. OYO is well capitalised and on the path of achieving profitability. Our two largest markets have demonstrated profitability at the slightest signs of industry recovery from the COVID-19 pandemic.”
Dr W. Steve Albrecht, a member of OYO’s Board of Directors and Chairman of the Audit Committee, commented, “As a part of OYO’s board, it’s heartening for me to see the strong interest in the company from the investor community. Today, OYO has more than 100,000 partners globally who are running successful businesses by utilising OYO’s proprietary technology, products and revenue management capabilities for delivering trusted accommodations for guests.”
JP Morgan, Deutsche Bank and Mizuho Securities served as the lead arrangers for this financing.