| Item 1.01 | Entry into a Material Definitive Agreement. |
Amendment to Credit Agreement
On February 15, 2023, WeWork Companies LLC, a Delaware limited liability company (the “WeWork Obligor”) and wholly owned subsidiary of WeWork Inc., a Delaware corporation, SoftBank Group Corp., a Japanese joint-stock company (“SBG” and in its capacity as obligor, the “Outgoing SoftBank Obligor”), SoftBank Vision Fund II-2 L.P., a limited partnership established in Jersey (the “Partnership”), acting by its manager, SB Global Advisers Limited, a limited company incorporated under the laws of England and Wales (the “Manager” and the Partnership, acting via the Manager, the “SVF Obligor”), SVF II GP (Jersey) Limited, a private limited company incorporated in Jersey (“SVF II GP”), the senior tranche issuing creditors (collectively, the “Senior Tranche Issuing Creditors”), the senior tranche L/C participants (collectively, the “Senior Tranche L/C Participants”), the junior tranche issuing creditor (the “Junior Tranche Issuing Creditor”), an incoming junior tranche L/C participant (the “Incoming Junior Tranche L/C Participant”), Goldman Sachs International Bank (“GSIB”), as the administrative agent for the Senior Tranche Issuing Creditors and the Senior Tranche L/C Participants, GSIB, as shared collateral agent for the Senior Tranche Issuing Creditors, the Senior Tranche L/C Participants, the Junior Tranche Issuing Creditor and the junior tranche L/C participants (the “Junior Tranche L/C Participants”), and Kroll Agency Services Limited, the administrative agent for the Junior Tranche Issuing Creditor and Junior Tranche L/C Participants, entered into the Sixth Amendment (the “Sixth Amendment”) to the Credit Agreement, dated as of December 27, 2019 (as amended or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement” and as amended by the Sixth Amendment, the “Credit Agreement”). The Sixth Amendment, among other things, provides for:
| | (i) | subject to the satisfaction of certain conditions, additional commitments of the Incoming Junior Tranche L/C Participant to the junior letter of credit tranche in an aggregate amount of $120.0 million; |
| | (ii) | the resignation of the Outgoing SoftBank Obligor with respect to the junior letter of credit tranche and the SVF Obligor’s assumption of all of Outgoing SoftBank Obligor’s obligations with respect to the junior letter of credit tranche with certain collateral support required in respect of the SVF Obligor’s obligations thereunder, shared on a pari passu basis with the senior letter of credit tranche; |
| | (iii) | the issuance of a letter of credit with a face value of $120.0 million under the junior letter of credit tranche for the benefit of the WeWork Obligor (the “Sixth Amendment Junior Letter of Credit”); |
| | (iv) | the drawing in full of the Sixth Amendment Junior Letter of Credit, thereby increasing the junior tranche reimbursement obligations from $350.0 million to $470.0 million; |
| | (v) | the extension of the termination date of the junior tranche reimbursement obligations from November 30, 2023 to March 7, 2025; |
| | (vi) | the increase of the interest margin applicable to the junior letter of credit tranche from 6.50% to 9.90% for reimbursement obligations, which are based on term SOFR (as defined in the Existing Credit Agreement); and |
| | (vii) | the increase the total commitments in respect of the senior letter of credit tranche to an aggregate of approximately $960.0 million, as of the effective date of the Sixth Amendment (the “Sixth Amendment Commitment Increase”). |
In addition, on February 10, 2023, the previously scheduled reduction of commitments in respect of the senior letter of credit tranche from approximately $1.1 billion to $930.0 million became effective. As a result of such reduction and the Sixth Amendment Commitment Increase, as well as the aggregate amount of letters of credit outstanding under the senior letter of credit tranche, approximately $105 million of contingent obligations in respect of letters of credit issued under the senior letter of credit tranche were required to be cash collateralized pursuant to the terms of the Credit Agreement.
The foregoing summary of the Sixth Amendment does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Sixth Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference in this Item 1.01.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information included in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.
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