WeWork skips interest payments on five series of notes

By Sarah Lizee

Olympia, Wash., Oct. 2 – WeWork Inc. said it has elected to withhold interest payments of about $37.3 million payable in cash and $57.9 million payable in the form of additional PIK notes due Oct. 2 on five series of notes issued by WeWork Cos. LLC and WW Co-Obligor Inc., according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The notes include the companies’ 15% first-lien senior secured PIK notes due 2027, 11% second-lien senior secured PIK notes due 2027, 11% second-lien exchangeable senior secured PIK notes due 2027, 12% third-lien senior secured PIK notes due 2027 and 12% third-lien exchangeable senior secured PIK notes due 2027.

The company has a 30-day grace period to make the interest payments before an event of default occurs.

WeWork said it has the liquidity to make the interest payments and may in the future decide to do so.

“Entering the grace period is intended to allow discussions with certain stakeholders in the company’s capital structure to commence, while also enhancing liquidity as the company continues to take action to implement its strategic plan,” the company said in the 8-K.

“As part of this strategic plan, the company is focused on rationalizing its real estate footprint and improving its capital structure.”

WeWork is a New York-based provider of shared workspaces and related business services.

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