(Bloomberg) -- Peloton Interactive Inc. has hired JPMorgan Chase & Co. to raise around $850 million through a new loan sale that will refinance existing debt, according to people with knowledge of the matter.

The US bank has begun informally reaching out to potential investors about the term loan and plans to officially launch syndication on Monday, said the people, who asked not to be identified because the discussions are private.

The bank is sounding out investor appetite for the new loan at a margin of 6.5 percentage points over the Secured Overnight Financing Rate, according to the people. Terms of the financing, including its size, are preliminary and may change, the people said.

A representative for JPMorgan didn’t immediately respond to requests for comment.

A representative for Peloton said the company is making progress on its refinancing strategy in close collaboration with its lead banks and financial advisor and continues “to be encouraged by the support and inbound interest we’ve received.” 

Once a pandemic darling, Peloton has struggled to recover from a recent slump in sales. Earlier this month, Chief Executive Officer Barry McCarthy announced plans to step down amid a restructuring that will reduce the fitness company’s global workforce by 15%.

Read More: Peloton Tumbles to Record Low After Announcing CEO Exit, Layoffs

Citigroup Inc. held informal discussions with private credit lenders to provide new financing to Peloton, Bloomberg News reported in March. Proposals under discussion included a loan of at least $750 million to pay off a portion or all of the fitness technology company’s $1 billion of convertible notes.

A spokesperson for Peloton said at the time the bank was not representing the company in those discussions.

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