L.O.T.W. #136 - Sonder Holdings checks in to new credit facility with Marriott International
Unique credit facility enables Sonder to convert - on a cashless basis - "Roll-Up Payments" owed to Marriott under a licensing agreement to a secured credit obligation due in 12 months
On August 5, 2025, Sonder Holdings raised $24.5 million through the sale of senior secured promissory notes (15% PIK interest, maturing July 2026) bundled with warrants exercisable at $1.50 per share. At the same time, the company entered into a new loan agreement with Marriott International, replacing certain near-term fees under its license arrangement with payment obligations under senior secured notes. Sonder also terminated its credit facility with Silicon Valley Bank.
đAt a Glance
Borrower: Sonder Holdings, Inc. and subsidiaries
Lender: Marriott International, Inc.
Deal Size: Commitment schedule will be updated as Roll-Up Payments are ârolled-upâ and exchanged into borrowings on the credit facility. Specifically identified Roll-Up Payments include:
Royalty Fees
Program Service Contributions (including Sales & Marketing Charges)
Loyalty Chargeout
Interest on late payments owed under
Structure: Multi-draw non-amortizing term loan
Rate: Prime + 3.00%, paid in kind
Term: 12 months
Use of Proceeds: Convert payments due under an existing license agreement into senior secured loan obligations
Source: Press Release
đˇBorrower Snapshot
Sector: Consumer Discretionary
Subsector: Hotels, Restaurants, and Leisure
Ownership: Public - (Nasdaq: SOND)
Commercial Stage: Revenue generating; LTM EBITDA (-)
Business Overview: Sonder Holdings, Inc. is a hospitality company that operates a network of design-driven, furnished apartments and boutique hotel-style units for short- and long-term stays. The company leases and manages properties across North America, Europe, and the Middle East, offering guests the consistency of a hotel with the space and flexibility of a home. Its model combines direct bookings through Sonderâs app and website with distribution via major travel platforms, targeting modern travelers, business guests, and digital nomads.
âď¸Structure & Terms
Source: SEC 8-K
Commitment: Undisclosed; total facility size is dependent on total amount of Roll-Up Payments converted to loan obligations during the term of the facility
Maturity: July 4, 2026
Collateral: Senior secured pari-passu with $24.5 million Investor Notes funded on August 5, 2025
Rate: Prime + 3.00%, PIK
Fees: Undisclosed
Notable Affirmative Covenants:
Monthly financial statements
13 week rolling cashflow forecast and variance report
Weekly cash balance report
Bi-weekly lender calls
12 months term with 15% PIK...haven't seen such structures