Business Context and Reporting Period
Expedia, Inc. filed this Form 8-K on August 5, 2010, to report the entry into a material definitive agreement regarding a new debt offering. The company is a Delaware corporation headquartered in Bellevue, Washington.
Key Financial Metrics and Debt Structure
- Debt Issuance: $750,000,000 aggregate principal amount of 5.95% Senior Notes due 2020.
- Interest Rate: 5.95% per annum, payable semiannually in arrears starting February 15, 2011.
- Maturity Date: August 15, 2020.
- Security Status: Senior unsecured obligations, unconditionally guaranteed by subsidiary guarantors.
- Ranking: Ranks equally with all existing and future unsubordinated and unsecured obligations.
Material Changes and Agreement Terms
The filing details the execution of an Indenture and a Registration Rights Agreement. Key terms include:
- Redemption: The Company may redeem notes at any time subject to a specified make-whole premium.
- Change of Control: Holders have the right to require repurchase at 101% of the principal amount plus accrued interest upon a triggering event.
- Covenants: The Indenture limits the Company's ability to create certain liens, enter into sale and lease-back transactions, or consolidate/merge, subject to exceptions.
- Registration Rights: The Company agreed to use commercially reasonable efforts to register the Notes for exchange into freely transferable Exchange Notes. Failure to meet registration obligations triggers an additional interest payment of 0.25% per annum.
Guidance, Risks, and Unusual Items
This filing does not contain forward-looking guidance, revenue projections, or management commentary on operational performance. The primary risk disclosed relates to the liquidity and transferability of the Notes, which are not registered under the Securities Act and may not be offered or sold in the United States except pursuant to specific exemptions. The filing explicitly states it does not constitute an offer to sell the Notes.
Investor Verification Checklist
- Verify the final closing date and actual proceeds received from the $750 million offering.
- Confirm the list of subsidiary guarantors included in the Indenture.
- Monitor the Company's progress on the Registration Rights Agreement to ensure the Notes can be exchanged for freely transferable securities.
- Review the specific "make-whole" premium calculation formula in the full Indenture text.