Peloton taps bond market for $600M to refinance term loan

What's the deal? Peloton Interactive launched a private offering of $600 million in senior secured notes due 2032, alongside a proposed $200 million five-year revolving credit facility. The connected-fitness company will use the proceeds, plus cash on hand, to repay all borrowings under its existing $1 billion five-year term loan facility, which will then be terminated.

Why now? The move follows a sharp improvement in Peloton's cash generation. In fiscal Q1 2027, revenue rose 2% year over year and free cash flow reached $143 million; the company said it paid down $280 million of term debt after quarter-end.

What's the endgame? Refinancing lets Peloton swap its term loan for notes maturing in 2032 and add liquidity through the new revolver. Any remaining proceeds will go to general corporate purposes, which may include share repurchases, capital expenditures, working capital, and acquisitions.

The notes carry a semi-annual coupon, with the interest rate set at pricing. S&P Global RatingsDealroom has a profile for this one. Try Dealroom → assigned Peloton a 'BB-' issuer credit rating with a stable outlook, and expects adjusted leverage of about 2x at fiscal 2027 year-end.

What could go wrong? The operating recovery is less settled than the balance sheet. Peloton has reported its first full year of net profit, but paid subscriptions continue to decline — a trend S&P expects to persist through fiscal 2028.

The signal: This is a deleveraging play, not a growth raise. The real test is pricing: whether the new notes lower borrowing costs and preserve flexibility, rather than the headline amount itself.

Read more: tipranks.com, businesswire.com

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