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Hospitality firm Oyo is looking to raise $600 million (over Rs 4,380 crore) in debt from the US institutional investors to service its existing loans, sources in know of the matter said on Thursday.

The company is raising $600 million in a term loan B (TLB) structure, the sources said. The company is taking the TLB to service its existing loans which are on higher interest rates, they added.

TLBs typically mature within six to seven years and have a small repayment schedule during the term of the loan, with the remainder due on the maturity date.

When contacted, an OYO spokesperson declined to comment.

Earlier in March this year, OYO Founder and Group CEO Ritesh Agarwal had told employees in an e-mail that the company’s India business is EBITDA positive in the January-March quarter, and is earning the same gross profits globally in dollars since January 2021 as it did in the pre-COVID period.

“OYO is on a steady path of resurgence in 2021 and we are seeing signs of recovery across India, Europe, and Southeast Asia. OYO’s survival through the COVID crisis and our resurgence show that we are a company with strong fundamentals and high value potential,” he had said.

Moody’s Investors Service on Thursday said it has assigned a first-time B3 corporate family rating (CFR) to Oravel Stays Private Limited (OYO).

At the same time, Moody’s has assigned a B3 rating to the senior secured term loan to be issued by Oravel Stays Singapore Pte. Ltd, OYO’s wholly-owned subsidiary. The proposed loan will be guaranteed by OYO and many of its subsidiaries, it added.

The outlook is stable. The company will use the loan proceeds to refinance its debt and for general corporate purposes, Moody’s said.

OYO is backed by leading investors, including the SoftBank Vision Fund, Sequoia Capital, Lightspeed Ventures, Hero Enterprise, and China Lodging Group, amongst others.