Wayfair Sells $800 Million of Bonds in High-Yield Market Debut

Online furniture retailer Wayfair Inc. boosted the size of its debut junk bond offering by $100 million on Tuesday to sell $800 million of notes, which will go toward refinancing looming maturities.

The five-year senior secured notes are callable in two years and come with a coupon of 7.25 percent, which is at the tight end of price talk, according to a person familiar with the deal, asking not to be identified discussing a private matter.

Wayfair has about $870 million of convertible debt due by the end of next year, data compiled by Bloomberg shows. Overall, its debt sale garnered more than $7 billion of orders on Tuesday morning, according to separate people familiar.

Goldman Sachs Group Inc., which acted as lead bookrunner on the offering, held meetings with leveraged finance investors earlier this month to gauge interest before launching the deal on Monday.

Also on Monday, S&P Global Ratings assigned Wayfair a B+ issuer rating alongside a BB issue-level rating. “Wayfair is navigating a challenging sales environment for the home furnishings category, offsetting soft revenue trends with substantial cost reductions that are improving profitability, free operating cash flow (FOCF) generation, and credit protection metrics,” the bond grader said in its press release.

The junk bond market has seen a deluge of deals this month on the back of robust investor demand and relative market stability ahead of the U.S. presidential election in November. The Federal Reserve’s historic interest rate cut last week has added to that positive sentiment, resulting in several debt launches from U.S. companies this week. On Monday alone, 10 companies stormed the U.S. junk bond market—the most issuers in a day so far this year.

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