Shares of Redfin Corp. jumped more than 12% in the extended session Monday after news that Apollo Global Management has agreed to commit as much as $250 million in financing for the real-estate brokerage.
“This transaction strengthens Redfin’s balance sheet by extending our debt maturities into 2028, supplies Redfin the flexibleness to repurchase or repay additional convertible debt going forward, and also displays Apollo’s beef up for Redfin’s long-term success,” Redfin
said in a filing with securities regulators.
The financing from the private-equity giant is available in the acquire of a first-lien term loan, of which half was borrowed on Friday, Redfin said.
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The remainder will probably be available as a delayed draw within the subsequent 12 months, Redfin said in the filing. The real-estate company will spend the cash on the balance sheet to purchase back a share of its unusual convertible notes.
As safety for the loan, Redfin granted Apollo a first precedence safety passion on substantially all of Redfin’s and its subsidiaries’ assets, with some exceptions, the company said.
In addition to buyback clauses, Redfin can spend proceeds from the loan to purchase additional convertible notes in the originate market or privately negotiated transactions, it said.
Shares of Redfin ended the regular trading day Monday up 0.6%. So far this year, the company’s stock has gained about 20%, compared with an advance of around 10% for the S&P 500 index
Within the past three months, nevertheless, the stock has underperformed the broader index, as rising mortgage rates and uncertainties around the economy have stored the housing market beneath strain. Redfin stock has misplaced 64% in the three months prior, compared with losses of around 7% for the S&P.