Peloton Interactive (NASDAQ:PTON) announced its plans to refinance its existing debt by offering $275 million in convertible senior notes that are due in 2029. Peloton stock dropped 3.6% on the news in afterhours trading Monday.
The fitness company also revealed it would enter into a $1 billion term loan facility with a five-year maturity.
The refinancing strategy includes establishing a $100 million revolving credit facility, also with a five-year term.
As part of its debt restructuring, Peloton intends to repurchase approximately $800 million of its 0.00% convertible senior notes due in 2026.
Bloomberg News reported that Peloton is offering a 5% to 5.5% coupon for its proposed $275 million issue of convertible bonds.
The company aims to refinance its current term loan and revolving credit facilities.
The terms, including the interest and conversion rates of the new notes, will be finalized upon pricing.