Redfin’s inventory rallies greater than 12% after Apollo throws real-estate brokerage a lifeline

The financing from the private-equity big comes within the type of a first-lien time period mortgage, of which half was borrowed on Friday, Redfin mentioned.

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The the rest will probably be accessible as a delayed draw inside the subsequent 12 months, Redfin mentioned within the submitting. The real-estate firm will use the money on the steadiness sheet to purchase again a portion of its current convertible notes.

As safety for the mortgage, Redfin granted Apollo a primary precedence safety curiosity on considerably all of Redfin’s and its subsidiaries’ property, with some exceptions, the corporate mentioned.

In addition to buyback clauses, Redfin can use proceeds from the mortgage to purchase extra convertible notes within the open market or privately negotiated transactions, it mentioned.

Shares of Redfin ended the common buying and selling day Monday up 0.6%. So far this yr, the corporate’s inventory has gained about 20%, in contrast with an advance of round 10% for the S&P 500 index
SPX.

In the previous three months, nonetheless, the inventory has underperformed the broader index, as rising mortgage charges and uncertainties across the financial system have saved the housing market underneath strain. Redfin inventory has misplaced 64% within the three months prior, in contrast with losses of round 7% for the S&P.