In what appears to be an expensive game of three-card-Monte, Bloomberg reports that Goldman Sachs has agreed to bail-out Softbank's huge money-losing bail-out of its investment in WeWork... saving Goldman's money-losing bet on the office-space-leasing company.
Bloomberg reports that, according to people with knowledge of the matter, Goldman is arranging a $1.75 billion line of credit as the first step in SoftBank’s pledge to put together $5 billion in debt financing for WeWork as part of its bailout package.
The new credit line will replace existing facilities that total about $1.1 billion, and is designed to free up cash that’s being used as collateral in the existing letters of credit.
For now, WeWork's bond price has limped higher in recent days...
Most notably, SoftBank will be listed as the borrower and WeWork will be a co-borrower.
Once the facility is in place, a $3.3 billion debt package will be arranged to complete the SoftBank plan, one of the people said. It’s not yet clear which banks will lead the second part of the debt financing.
But for now, many are still looking for answers from the original CEO as to just how this farce occurred...
Finally, as one veteran investor mocked - this all looks like one giant self-reacharound for Goldman to rescue their own investment in WeWork from further writedowns.