Sabre Corporation has announced an exchange of $150 million of existing 4.000% exchangeable senior notes due 2025 for exchangeable senior notes due 2026. This move is part of privately negotiated exchange agreements with a limited number of existing holders, who are qualified institutional buyers and institutional accredited investors. The exchange will see $150.0 million in aggregate principal amount of the existing exchangeable notes exchanged for $150.0 million in aggregate principal amount of new exchangeable senior notes due 2026 and an aggregate of approximately $32.6 million in cash.
Following the exchange, the aggregate principal amount of the existing exchangeable notes outstanding will be $183.0 million, while the aggregate principal amount of the new exchangeable notes outstanding will be $150.0 million.
The new exchangeable notes will be senior, unsecured obligations of Sabre GLBL, fully and unconditionally guaranteed by Sabre and Sabre Holdings Corporation. These notes will accrue interest payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024. The interest rate for the new exchangeable notes will be determined based on the volume-weighted average price of Sabre’s common stock, over a measurement period following execution of the exchange agreements, but in no event will be less than 4.00% or greater than 7.50%.
The initial exchange rate for the new exchangeable notes is 222.2222 shares of common stock per $1,000 principal amount, representing an initial exchange price of approximately $4.50 per share of common stock. This represents a premium of approximately 72.4% over the last reported sale price of $2.61 per share of common stock on March 1, 2024.
In the event of a "fundamental change," holders of the new exchangeable notes may require Sabre GLBL to repurchase their new exchangeable notes for cash. Additionally, Sabre expects that holders of existing exchangeable notes participating in the exchange will seek to sell shares of common stock and/or enter into various derivative positions with respect to shares of common stock to establish hedge positions with respect to the new exchangeable notes.
Following these announcements, the company's shares moved -8.0%, and are now trading at a price of $2.4. For the full picture, make sure to review Sabre's 8-K report.
