Sotheby’s is moving swiftly to secure financing, planning to issue an $825 million senior secured, fixed-rate bond to refinance debt coming due next year. The luxury auction house, controlled by Patrick Drahi and ADQ, seeks to lock in terms now, preempting potential market volatility linked to US-Iran negotiations that could complicate future capital raising.

Proceeds from the five-year note offering will primarily address a $765 million tranche of senior secured debt maturing in October 2027, with residual funds earmarked for general corporate uses. This move follows initial investor outreach late last year, when the company delayed a market launch after receiving less favorable initial pricing indications from bond investors.

Investor concerns previously centered on achieving a coupon around 10.5% and documentation tightness regarding restricted payments and further borrowing capacity. The timing now coincides with improved sentiment, evidenced by Moody’s and S&P Global Ratings both upgrading their outlooks on the auction house ahead of the planned issuance.

Sotheby's adjusted Ebitda stood at $304.4 million for the last reported year, incorporating savings from the New York headquarters sale and other cost-saving measures. The successful placement of this new high-yield paper will solidify the capital structure for the near term.