Redfin announced Wednesday it’s offering $525 million in senior notes, which will be due in 2025. The company says it plans to use the net proceeds of the offering of senior notes — which are essentially short term bonds sold at a fixed interest rate — to repurchase a portion of outstanding 1.75 percent senior notes that will be due in 2023.
Redfin also expects to use the remainder of the net proceeds “for working capital and other general corporate purposes,” the company said, in a filing with the U.S. Securities and Exchange Commission.
“Redfin may also use a portion of the net proceeds to invest in or acquire third-party businesses, products, services, technologies or other assets,” the filing continues.
The interest rate, offering price and other terms were not yet revealed and are yet to be negotiated with Redfin and the purchasers of the notes.
The filing also gives a preliminary estimated look at Redfin’s third-quarter earnings, for the three months ending Sept. 30, 2020.
Redfin estimates it will post $235 million in total revenue — a slight decrease from the third quarter of 2019, when it posted $238 million in revenue. The decrease can be attributed to the company’s properties revenue decreasing to $18.5 million from $80 million, year over year. Real estate services, meanwhile increased year over year by $55 million to $209 million in the third quarter.
The company was also more profitable in the third quarter of 2019, Redfin estimates. The company estimates it will post a net income of $32 million, after posting a net income of $6.7 million in the third quarter of 2019.
Despite the headwinds of COVID-19, Redfin’s stock has had a strong year. It closed the day on Oct. 14 trading at $55.67, the highest its been in company history. At the height of the COVID-19-fueled shutdown of the housing market, Redfin’s stock was trading at around $10 per share.