Redfin: Funds managed by Apollo agree to commit up to $250M of financing

Redfin Corporation (RDFN) on Monday announced that funds managed by Apollo Capital Management, L.P. (APO) and its affiliates have agreed to commit up to $250M of financing for Redfin in the form of a first lien term loan facility. Redfin borrowed half of the loan on October 20, 2023 and the remainder will be available as a delayed draw during the following 12 months. Redfin will use cash on the balance sheet to simultaneously repurchase a portion of the company’s existing convertible notes. “This transaction strengthens Redfin’s balance sheet by extending our debt maturities into 2028, gives Redfin the flexibility to repurchase or repay additional convertible debt going forward, and also reflects Apollo’s support for Redfin’s long-term success.” As security for its obligations under the facility, Redfin granted Apollo a first priority security interest on substantially all of Redfin’s assets and the assets of its material subsidiaries, subject to certain exceptions. As part of the transaction, Redfin has agreed to repurchase $5M principal amount of its convertible notes due in 2025 held by Apollo and $72M principal amount of its convertible notes due in 2027 held by Apollo for an aggregate repurchase price of approximately $50M using cash on the balance sheet. In addition, Redfin retains the ability to use proceeds from the transaction to buy additional convertible notes in the open market or via privately negotiated transactions as well as the ability, should the need arise, to address the convertible notes at maturity, repay preferred equity, pay interest, pay fees and expenses, and general corporate purposes. Shares of Redfin are up 11% in pre-market trading.