WeWork comprehensive debt recapitalization transaction

Davis Polk is advising an ad hoc group of unsecured noteholders to WeWork Companies LLC in connection with a comprehensive debt recapitalization transaction that includes, among other things, (1) the issuance of $500 million new first-lien notes, offered to all public unsecured noteholders and backstopped by the ad hoc group, (2) the issuance of $175 million new first-lien delayed-draw notes to a third-party investor pursuant to a securities purchase and commitment agreement, (3) the rollover of $300 million of first-lien notes currently held or that may be issued to SoftBank into new first-lien notes or new first-lien delayed-draw notes, (4) an offer to exchange public unsecured notes into (i) subject to a participation in the new first-lien notes, second-lien notes and equity, (ii) new third-lien exchange notes and equity, or (iii) equity, (5) an offer to exchange (i) $250 million unsecured notes held by SoftBank affiliates into second-lien convertible exchange notes and equity and (ii) $359.5 million of unsecured notes held by SoftBank affiliates into new third-lien exchange notes and equity, (6) the equitization of the remaining unsecured notes held by SoftBank affiliates, and (7) consent solicitations with respect to the public unsecured notes. On March 17, 2023, the ad hoc group, which collectively holds approximately 60% of WeWork’s public unsecured notes, executed a transaction support agreement with WeWork and SoftBank, pursuant to which the ad hoc group has agreed to support the transactions by, among other things, exchanging their unsecured notes for second-lien notes and participating in and backstopping the offering of $500 million of new first-lien notes. 

WeWork is one of the leading global flexible space providers committed to delivering technology-driven turnkey solutions, flexible spaces and community experiences. WeWork serves a membership base of businesses large and small through its network of more than 800 locations around the world.

The Davis Polk restructuring team included partner Eli J. Vonnegut, counsel Robert (Bodie) Stewart and Joanna McDonald and associates Jacob Weiner, Stephen Ford, Alexander K.B. Shimamura, Sophy Ma and Mary Kudolo. The finance team included partner David Hahn and counsel Andrei Takhteyev. The capital markets team included partner Pedro J. Bermeo and counsel Stephen A. Byeff. The tax team included partner Lucy W. Farr and counsel Leslie J. Altus. All members of the Davis Polk team are based in the New York office.