Wework bonds tumbled on Tuesday after the Financial Times reported that the unprofitable property company faced pressure from its largest outside investor to pull a hotly anticipated initial public offering.
Softbank, which together with its Saudi Arabia-backed Vision Fund have ploughed more than $10bn into New York-based WeWork, has urged the group to shelve the IPO after it received a cool reception from potential investors, several people briefed on the matter said.
Prices for the bonds, which Wework sold last year, had surged above the 100 cent mark on the dollar last month after the company unveiled its IPO plan and a new $6bn debt facility. However, the $6bn borrowing is contingent on the group raising at least $3bn in its flotation.
The more than $702m of debt, which Wework borrowed last year, dropped roughly 3 cents on the dollar to trade at 98 cents on Tuesday, according to bond trading platform Marke taxess.
Advisers to Wework were still testing investor appetite for the IPO at a drastically lower valuation of between $15bn and $20bn. The group, which is led by its co-founder and chief executive Adam Neumann, was valued at $47bn when Softbank injected $2bn into the group earlier this year.
The drop in the bond prices sent the yield up roughly 70 basis points to 8.3 per cent.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
