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Peloton clinched a critical $1bn loan on Thursday, allowing the maker of home fitness equipment to shore up its finances, said people briefed on the matter.

The company was at one point was valued at nearly $50bn as consumers clamoured for its stationary bicycles during the depths of the pandemic. But it has faltered as consumers emerged from the pandemic, with Americans choosing to return to gyms and fitness studios in person, crimping demand for its products.

Earlier this month chief executive Barry McCarthy stepped down and the company announced it would cut 15 per cent of its workforce as its sales softened.

The $1bn five-year loan will allow it to refinance debts that mature in the next few years, including repurchasing part of a convertible bond that matures in 2026.

The new financing has been considered integral to giving management time to execute a turnaround plan since Peloton had burnt through capital and faced the 2026 maturing convertible debt.

It had a unique challenge tied to the $1bn convertible bond that required it to refinance most of its debts over the coming year. The company’s existing $750mn term loans included a provision that required it to pay off the debt immediately if more than $200mn of the convertible bond was outstanding in November 2025, as opposed to in 2027 when the loan was otherwise set to mature.

The new loan Peloton secured on Thursday yielded roughly 12 per cent, which, while at the lower end of a range initially marketed to investors, nonetheless underscored the stress it faces. The interest rate on the loan was set 6 percentage points above the floating interest rate benchmark, which sits at about 5.3 per cent. A discount on the loan sweetened the yield to about 12 per cent for lenders. Unusually, the debt was not graded by the major US credit rating agencies.

By contrast, bonds from risky single B-rated borrowers are trading with a yield below 8 per cent, while triple C and lower-rated debt — among the lowest grades assigned by credit rating agencies — traded hands this week at about 13.9 per cent, according to data from ICE Data Services.

The new loan, along with a $300mn convertible bond Peloton issued on Wednesday and a new $100mn revolving credit line, will remove near-term financing issues for the company.

The timing of the offering was particularly opportune for Peloton as investors have bid up the prices of risky corporate bonds and loans, clamouring for high-yielding debt. Banks led by JPMorgan Chase and Goldman Sachs were ultimately able to reduce the interest rate Peloton paid on the new loan given the demand.

Peloton did not immediately respond to a request for comment.

PHOENIX — A new measure signed into law Thursday temporarily allows Arizona abortion providers to perform the procedure in neighboring California.

California Gov. Gavin Newsom enacted the bill, which takes effect immediately, in response to a recent Arizona Supreme Court ruling that said a near-total abortion ban from 1864 is enforceable in the state.

The law also would allow patients to receive abortion services from their Arizona health care providers in California through Nov. 30.

“Arizona Republicans tried to turn back the clock to 1864 to impose a near-total abortion ban across their state. We refuse to stand by and acquiesce to their oppressive and dangerous attacks on women,” Newsom, a Democrat, said in a statement Thursday.

The fate of Arizona’s 1864 ban, which doesn’t have exceptions for rape or incest, remains up in the air. The state Supreme Court pushed back its enforcement by several months, meaning Arizona’s 15-week abortion ban will be the law of the land until Sept. 26, according to the Arizona attorney general’s office.

The California Legislative Women’s Caucus took the reins in drafting the state’s legislation. Its chair, state Sen. Nancy Skinner, said the new law can provide the women of Arizona with an abortion safe haven when the 1864 statute takes effect.

“Our Arizona sisters can come to California to get the health care they need from their own doctors, who they know and rely on,” Skinner said in a statement. “California has made it crystal clear for all those who need or deliver essential reproductive care: We’ve got your back.”

Arizona Gov. Katie Hobbs signed a repeal of the ban on May 2, but the repeal won’t go into effect until 90 days after the Legislature’s legislative session ends, which is likely to come in July.

Source: Election results are from The Associated Press.

Produced by Michael Andre, Camille Baker, Neil Berg, Michael Beswetherick, Matthew Bloch, Irineo Cabreros, Nate Cohn, Alastair Coote, Annie Daniel, Saurabh Datar, Leo Dominguez, Andrew Fischer, Martín González Gómez, K.K. Rebecca Lai, Jasmine C. Lee, Alex Lemonides, Ilana Marcus, Alicia Parlapiano, Elena Shao, Charlie Smart, Urvashi Uberoy, Isaac White and Christine Zhang. Additional reporting by Mitch Smith, Patrick Hays, Luke Broadwater, Campbell Robertson and Neil Vigdor; production by Amanda Cordero and Jessica White.

Editing by Wilson Andrews, Lindsey Rogers Cook, William P. Davis, Amy Hughes, Ben Koski and Allison McCartney.

Source: Election results are from The Associated Press.