Brian Chappatta, Columnist

WeWork’s Junk Bonds Lose Their IPO Pop

The price of the co-working company’s debt is falling, suggesting traders are skittish about its future.

May 22, 2019 at 11:30 AM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Growth has glossed over a multitude of unknowns.
Photographer: Luke MacGregor/Bloomberg

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WeWork Cos. doesn’t seem to quite be working for junk-bond investors.

For a moment earlier this month, it looked as if its high-yield debt issued 13 months ago was going to climb back to 100 cents on the dollar, riding a wave of momentum from the company’s April 29 announcement that it filed paperwork confidentially with the U.S. Securities and Exchange Commission to hold an initial public offering. The world’s biggest co-working company, in other words, was poised to have the second-largest U.S. IPO of 2019 behind Uber Technologies Inc. And with that, the promise of a flood of cash to a business that runs staggering losses. The securities, which are rated below investment grade and mature in 2025, rose to as high as 99.75 cents on the dollar, up from 94.75 cents.