Cravath-Led Booking Prices $4B In New Debt Amid Downturn

By McCord Pagan
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.

Sign up for our Retail & E-Commerce newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!



Law360 (April 9, 2020, 5:21 PM EDT) -- Represented by Cravath Swaine & Moore LLP, Booking Holdings Inc., the owner of travel brands such as Booking.com, Priceline and Kayak, said Thursday it had priced $4 billion in new debt during a downturn in the travel and hospitality industry due to the deadly COVID-19 pandemic.

Booking said the debt, before deductions for fees, includes $3.25 billion in senior, unsecured notes and $750 million in senior convertible notes, of which investors have 13 days to buy an additional $112.5 million.

The company, whose other brands include restaurant reservations website OpenTable, Rentalcars.com and Asia-based travel site Agoda, said the proceeds from the notes would be used for general corporate purposes, including paying off debt due this June and in September of next year.

Like many companies, Booking has been hit hard in the last several weeks by the economic fallout from COVID-19. The company's Nasdaq stock has fallen more than 30% from its high of $2,086.90 per share on Jan. 10, closing at $1,420.64 each on Thursday.

Booking didn't explicitly mention the novel coronavirus in its press releases announcing the debt, but in separate documents filed with the U.S. Securities and Exchange Commission this week the travel company painted a sobering picture of its business at a time when much of the world is being urged to stay at home.

In a filing, Booking said the economic fallout and government orders discouraging or restricting travel have led to a sharp decline in consumer spending "and an unprecedented decline in travel and restaurant activities." The company said that in recent days, new room reservations have declined more than 85% as compared to 2019, and that the trend could continue.

While the first quarter of the year saw only limited disruption to business through January and part of February, Booking said it expects the second quarter of the year to be even worse than the first.

"We expect the outbreak and its effects to continue to have a significant adverse impact on our business for the duration of the pandemic and during the subsequent economic recovery, which could be an extensive period of time," Booking said.

On Thursday, the World Health Organization reported more than 1.4 million people globally have contracted the novel coronavirus, and that more than 85,000 people have died as a result.

Last week, cruise line Carnival Corp. said it was raising about $6 billion in a stock and notes offering and had faced similar troubles. In its statement about the offering, Carnival said the pandemic has had and will continue to have a "materially adverse impact" on it, including its ability to get acceptable financing.

Booking was represented by a Cravath Swaine & Moore LLP team led by Craig F. Arcella.

A spokesperson for Booking did not immediately return a request for comment.

The underwriters for the notes offerings included BofA Securities Inc., Deutsche Bank Securities Inc. Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Citigroup Global Markets Inc., TD Securities (USA) LLC, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, HSBC Securities (USA) Inc., ICBC Standard Bank Plc, Mizuho Securities USA LLC and Standard Chartered Bank.

The underwriters for the offering were represented by a Latham & Watkins LLP team including Gregory P. Rodgers, Benjamin J. Cohen, Arash Aminian Baghai, Yi Han Goh, Roger Yarett, Jessica Lim, Jiyeon Lee-Lim, Y. Bora Bozkurt, Ian Lachow, Amy Robertson and Ronald Moore.

--Editing by Alanna Weissman.

Updated: This story has been updated with additional counsel information for Booking.

For a reprint of this article, please contact reprints@law360.com.

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!