Hacker News Reader

> Also, why raise at 10% interest when interest rates are so low?

Interest rates on a house reflect the fact that the bank can repossess it if you stop paying.

AirBnB's higher interest rate reflects the chance that there'll be nothing left.

Corporate bond yields spiked due to business risks posed by Covid19. B rated bonds went from ~5% to >10.65%

a preferred Payment In Kind (PIK) is not the same as a high yield bond.

PIK is closer to equity so a 10% interest is pretty high

> Also, why raise at 10% interest when interest rates are so low?

There's an old proverb in finance that goes:

"If you borrow a million and can't pay it back, you're in trouble.

If you borrow a billion and can't pay it back, the bank's in trouble."

There was no way Airbnb was going to get that kind of cash at anywhere near 'market rates'.

Interests rate are low for low-risk borrowers, Airbnb isn't one.