Sabre Corporation completed a private placement of $1 billion in senior secured notes through its wholly‑owned subsidiary Sabre Financial Borrower, LLC. The notes carry an 11.125% coupon, mature on June 15, 2029, and are expected to close on December 5, 2025. The issuance is guaranteed by Sabre Financing Holdings, LLC and is secured by a first‑priority interest in the assets of Sabre’s foreign subsidiaries, covering up to $400 million, as well as a pledge of Sabre Financial loan receivables and equity interests.
The proceeds will fund an inter‑company loan to Sabre GLBL, Inc., which will use the funds to prepay, redeem, or refinance existing debt. The move is part of Sabre’s strategy to reduce its debt‑to‑capital ratio, which stood at 86% with total debt exceeding $4.2 billion as of the most recent quarter. The company’s negative shareholder equity and high cost of capital have prompted a negative outlook from S&P Global Ratings, which reaffirmed a B‑ rating but downgraded the outlook to negative.
While the new notes carry a higher coupon than the debt being refinanced, the transaction improves Sabre’s maturity profile by extending the average maturity of its debt. Analysts expect cash interest costs to rise in the short term because of the 11.125% rate, but the refinancing is intended to reduce the company’s overall debt‑service burden over the long run and to free up capital for technology investments.
Sabre has set a target of more than $200 million in pro‑forma free cash flow for 2025, yet S&P forecasts negative free operating cash flow for 2025 and 2026. The discrepancy highlights the tension between the company’s growth ambitions and the headwinds of suppressed profitability and high debt‑service costs. The guidance reflects management’s confidence that the new financing will support future capital expenditures, even as cash flow projections remain cautious.
Investors reacted to the announcement in the context of a recent earnings downgrade and a negative outlook revision by S&P. Management emphasized that the financing is a decisive step to strengthen the balance sheet and extend debt maturities while continuing to invest in technology. CEO Kurt Ekert said, “We are taking decisive steps to strengthen our balance sheet and extend debt maturities while investing in technology.”
Sabre’s broader strategy includes a technology transformation that leverages Google Cloud and generative AI, positioning the company to capture growth in the low‑cost carrier market and enhance its distribution capabilities. The new debt issuance is a key component of that strategy, providing the liquidity needed to accelerate the transformation while managing the company’s high leverage profile.
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