(Bloomberg) -- The value of WeWork’s bonds sunk the most on record Tuesday morning after the company said it was pushing back its planned initial public offering.
The company’s $669 million of junk-rated bonds due in 2025 dropped as much as 7.3 cents on the dollar to 95.5 cents Tuesday in New York, according to the Trace bond-price reporting system. That’s the biggest decline since the notes were issued in April 2018 and the lowest price in three months.
The company’s troubled IPO has spooked bond investors who are fretting over how the cash-burning company will finance itself to continue its growth. The office-leasing company is among a short list of unprofitable businesses that have convinced the high-yield bond market to lend to them, alongside Netflix Inc. and Uber Technologies Inc.
WeWork’s bonds had surged to as high as 105.4 cents on the dollar in August after it filed for an IPO, announcing that it had paid down a portion of the notes and was lining up another $6 billion of debt financing to help fund its growth. WeWork sold $702 million of the notes in its debut offering.
They are rated B+ by S&P Global Ratings, four levels below investment-grade. Fitch Ratings grades them two steps lower at B-.
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To contact the reporter on this story: Claire Boston in New York at cboston6@bloomberg.net
To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Shannon D. Harrington
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