TripAdvisor Secures $500M Term Loan B, Redeems Senior Notes

By Bobby Samwell • Tuesday, July 09 06:01 • Permanent Link

TripAdvisor, Inc. (NASDAQ: TRIP) has recently announced the successful closing of a term loan B facility and the redemption of senior notes. The company closed on a new $500 million term loan B credit facility maturing in 2031, with an interest rate based on SOFR plus 2.75%. The term loan B facility was offered at 99.75% of par and is required to be paid down at 1.00% of the aggregate principal amount per year. The proceeds from this facility will be used to redeem all of the $500 million aggregate principal amount of the company’s outstanding 7.000% senior notes due in 2025.

This move marks a significant shift in TripAdvisor's financial structure, as it replaces the 7.000% senior notes due in 2025 with a new term loan B facility. The change in the interest rate from 7.000% on the senior notes to SOFR plus 2.75% on the term loan B facility represents a substantial adjustment in the cost of borrowing for the company.

The redemption of the senior notes due in 2025 will also impact TripAdvisor's future cash flows, as it will no longer have the obligation to make interest payments on these notes. This change in financial obligations could have a notable effect on the company's bottom line in the coming years.

The market has reacted to these announcements by moving the company's shares 1.8% to a price of $17.91. If you want to know more, read the company's complete 8-K report here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.