, giving the company a bigger stockpile of money to pay off these recent costs.
While the company has had a rocky year, it has also done better than other travel and hospitality booking websites, and the short-term rental market has emerged as more popular than hotels during the pandemic. This year hasn't been easy for Airbnb, but compared to some of its competition, it's been successful at surviving the bump. In the IPO filing, Airbnb had to outline the ways that the company will use the money raised by the public offering.
One area that it didn't highlight is the repayment of two $1 billion loans it took out this year: the first from private equity firm Silver Lake Partners and Sixth Street Partners, and the second from Silver Lake, Apollo Global Management, Benefit Street Partners, Glade Brook Capital Partners, Oaktree Capital, and Owl Rock Capital. , a drop of almost 50% since Airbnb was valued at $31 billion in 2017.
They also didn't come cheap. One loan has an interest rate of 7.5% plus a benchmark rate known as the London interbank offered rate, or Libor, while another has an interest rate of 10% plus Libor, according to the company's IPO filing. The loans both have a roughly five-year term, and if carried to term they could end up costing the company at least $1.44 billion and $1.61 billion respectively. That is more than $1 billion in interest payments alone.
The filing showed how much these loans have already cost the company. Up through the end of September, the company paid interest expenses of $100.5 million. Overall interest expenses were up $100.7 million in that same period year-over-year. Interest payments during the first nine months of 2020 took up 4% of revenue, a hefty chunk for a company dealing with a threat like the pandemic.
What is Airbnb thinking?