Airbnb Inc. has taken out a $1 billion line of credit to help it cope with the sharp plunge in travel bookings brought about by the coronavirus pandemic, multiple publications reported late Tuesday.

The loan marks the second tranche of capital the company has raised in recent weeks. On April 6, Airbnb secured $1 billion in debt and equity financing from Silver Lake and Sixth Street Partners at a reported valuation of $18 billion, about half of what it was worth after its last major funding round.

The two investment firms also contributed to the company’s latest debt raise, according to sources who spoke with CNBC. They are said to have been joined by more than a half-dozen other investors. The list includes T. Rowe Price, Blackrock, Oaktree Capital, Apollo Global Management, Benefit Street Partners and Owl Rock Capital, as well as several additional institutional backers.

The broad investor participation suggests a degree of optimism on Wall Street about Airbnb’s ability to weather the coronavirus pandemic. The details that have emerged about the loan indicate it’s for five years and carries an interest rate of about 9%, less than the 11.5% rate the debt portion of Airbnb’s previous $1 billion raise is said to carry. The lower rate stems from the fact that the newest line of credit is first lien debt, meaning the backers that provided the loan will be paid before other investors in the event of a default.

Airbnb was planning to go public in 2020 before bookings evaporated, Chief Executive Officer Brian Chesky revealed during an interview earlier this week. Additionally, the company was readying an unspecified “big launch” for June 4 that the CEO indicated would be delayed.

Airbnb has also made other, more significant adjustments since the onset of the pandemic. Word emerged last month that the company has suspended all marketing activities and its top executives took a 50% pay cut in moves that are expected to shave $800 million off its 2020 expenses.

Not surprisingly, other major tech players in the travel sector are also revisiting their business roadmaps. Expedia Group Inc. has withdrawn its full-year earnings forecast and first-quarter guidance while Booking Holdings Inc., which owns Bookings.com as well as other popular travel sites, is seeking a $2 billion line of credit. The fact that Airbnb has managed to raise $2 billion of its own may be encouraging news for publicly traded Booking, which unlike Airbnb was profitable before the pandemic.

Image: Pixabay