Wedding Planning Site The Knot Sees Freshly Refinanced Loan Dive

(Bloomberg) -- Wedding planning platform The Knot Worldwide has seen the price of a loan it refinanced just last month plunge to deeply distressed levels.

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Its $670 million loan, which refinanced at par, had been trading around 70 cents this month, according to data compiled by Bloomberg. At least two trades took place this week in which the debt changed hands at about 50 cents, according to people familiar with the matter, who asked not to be identified discussing private information.

While leveraged-loan prices can experience big swings on little trading because of relatively limited liquidity, the move was even more significant because the company, backed by private equity firms Permira and Spectrum Equity, had refinanced the loan very recently and pushed its maturity out by two and a half years to 2030.

Formed through a merger in 2018, the company combined WeddingWire Inc. and XO Group, which operated The Knot, creating a platform for couples to plan weddings and connect with vendors. The company later faced declining revenue and higher vendor churn, while the shift from traditional search engines to artificial intelligence-generated results has also hurt their traffic, according to a Moody's report from last month.

"Overall couple engagement is improving and the quality of engagements is improving," a spokesperson for The Knot said in response to Bloomberg News queries. Traffic to the marketplace has increased 20% year-to-date compared with the same period last year. Unique booking opportunities — unique couple leads submitted to a vendor category, intermediated by The Knot — have grown 9% year-on-year in August, said the spokesperson.

The latest refinancing offered loan investors a spread of 5.25 percentage points over the benchmark. It also included a payment-in-kind option, which means the company could opt to roll up the interest instead of paying it in cash.

A Permira representative declined to comment. Spectrum didn't reply to a request for comment.

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