WeWork bond hits lowest levels since IPO filing

Quick read

WeWork's only junk bond was trading Tuesday at its lowest level since it filed for an initial public offering in mid August.

The office space provider's 7.875% 2025s were trading as low as 97.75 this morning, a drop from a recent high of 105.375 on August 15 immediately following the IPO filing, according to MarketAxess data.

The bond price bounced back to change hands late morning at 98.75, but remained well below the above par levels seen over the last three weeks or so.

The price of the bond has been on a downward trajectory following news that the workspace provider had been considering a radical reduction of an initial US$47bn valuation on the IPO.

A valuation could come in as low as US$15bn-US$18bn, according to Reuters, citing people familiar with the matter.

That is bad news for the cash burning start-up which needs funding to fuel its growth plans, and has US$6bn of syndicated loans that are contingent on a successful IPO.

WeWork's largest investor SoftBank has reportedly advised against the IPO but CNBC cited sources on Tuesday that the IPO roadshow would start as soon as Monday.

The August IPO filing unveiled details about the company's financial statements for the first time, showing a net loss of US$690m in the first half of 2019 on revenue of US$1.5bn.