Table of Contents WEWORK COMPANIES INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2019 (UNAUDITED) liens, to enter into certain affiliated transactions and to consolidate or merge with, or convey, transfer or lease all or substantially all of its assets, subject to important qualifications and exceptions. The Senior Notes rank equally in right of payment with any existing and future senior indebtedness of the Company, and are senior in right of payment to any existing and future subordinated obligations of the Company, and are effectively subordinated to all secured indebtedness of the Company (including obligations under the credit facilities discussed in Note 21) to the extent of the value of the collateral securing such indebtedness, and are structurally subordinated to all liabilities of any subsidiary that does not guarantee the Senior Notes. The Senior Notes are unconditionally guaranteed on a senior basis by each of our subsidiaries that guarantees obligations under the Company’s credit facilities or certain other indebtedness of the Company or a guarantor. As of the issuance date, each restricted subsidiary that guaranteed obligations under the credit facilities discussed in Note 21 also guaranteed the Senior Notes. During the six months ended June 30, 2019, the Company recorded interest expense of $27.6 million and amortization of deferred financing costs of $1.1 million related to the Senior Notes, which are both included as a component of interest expense on the accompanying condensed consolidated statements of operations. 424 Fifth Venture Loans — As of June 30, 2019, the Company has three loans outstanding relating to the 424 Fifth Venture real estate investment and development project (collectively, the “424 Fifth Venture Loans”) as follows: On February 8, 2019, the 424 Fifth Venture entered into an interest-only mortgage loan agreement (the “Mortgage Loan”) in the amount of up to $500.0 million. As of June 30, 2019, $316.2 million was outstanding under the Mortgage Loan. The interest spread payable under the Mortgage Loan increases by 25 basis points on the 18-month anniversary of the closing based on certain elections by the Company. On February 8, 2019, the 424 Fifth Venture also entered into an interest-only mezzanine loan agreement (the “Senior Mezzanine Loan”) in the amount of up to $150.0 million. As of June 30, 2019, $95.2 million was outstanding under the Senior Mezzanine Loan. The interest spread payable under the Senior Mezzanine Loan increases by 25 basis points on the 18-month anniversary of the closing based on certain elections by the Company. On February 8, 2019, the 424 Fifth Venture entered into an interest-only junior mezzanine loan agreement (the “Junior Mezzanine Loan”) in the amount of up to $250.0 million. As of June 30, 2019, $214.6 million was outstanding under the Junior Mezzanine Loan. During the six months ended June 30, 2019, the weighted average interest rate on the 424 Fifth Venture Loans was 7.6%, and $18.6 million of interest expense was capitalized and included within the Company’s construction in progress balance as a component of property and equipment, net on the accompanying condensed consolidated balance sheet, as the property is currently under development and not ready for its intended use. The 424 Fifth Venture Loans are secured only by the assets and equity of the 424 Fifth Venture, and are recourse to the Company in certain limited circumstances and the Company has provided certain customary performance guarantees standard for real estate and construction financing. Other Loans—As of June 30, 2019, the Company has various other loans (the “Other Loans”) with original principal amounts of $85.0 million and interest rates ranging from 2.5% to 6.2%. During the six months ended June 30, 2019, the Company recorded interest expense of $1.7 million, related to these Other Loans. F-108