Investors didn’t just lend Peloton money this week but lent the company more than Peloton asked for.

And if that makes Peloton sound like a comeback story. I don’t think it is, at least not yet. To me, this is a cash-flow story that’s being priced like a risk one.

What’s Happening

Peloton said it upsized and priced $700 million of 8.6% senior secured notes due 2032. That’s up from the $600 million it announced a day earlier. Peloton expects the sale to settle on November 20, subject to customary closing conditions.

Peloton says the proceeds, along with cash on hand, will repay and terminate its existing $1 billion five-year term loan and anything left over can go to general corporate purposes, which the company says may include share buybacks, capital expenditures and acquisitions.

The refinancing also includes a proposed $200 million five-year revolving credit facility.

S&P rates Peloton BB-, with the notes themselves rated a notch higher at BB. Moody’s rates the notes Ba3. That puts this deal in high-yield territory, and it’s been reported as Peloton’s first trip into that market. Peloton’s own release simply says the offering was increased; reports describe strong demand behind the upsize.

What Junk Really Means

“Junk” sounds harsh, but it’s just a credit tier. Anything rated BB+ or lower by S&P, or Ba1 or lower by Moody’s, counts as non-investment grade. Peloton sits a few notches into that range.

The rate tells you how lenders see the risk. At 8.6%, $700 million costs about $60 million a year in interest (my Google math). Initial price talk was reportedly in the low-to-mid 9% range, so Peloton appears to have landed a better rate than expected.

What the Raters Are Saying’

In my opinion, the ratings commentary is more interesting than the headline and the S&P says Peloton keeps a strong position in connected fitness but expects its paid connected fitness subscriber count to keep declining through fiscal 2028.

Moody’s says Paid Connected Fitness Subscriptions fell to about 2.55 million in fiscal 2026, from 2.80 million in fiscal 2025 and 2.98 million in fiscal 2024. It also says subscriptions made up about 69 percent of revenue and 93 percent of gross profit.

In other words, the hardware base is shrinking, and the subscription is the business.

So Where Is the Money Going?

If Peloton is borrowing at junk rates, where is the enthusiasm in fitness right now? Here’s what I can back up.

The first is racing. In September, a consortium led by L Catterton, alongside founders Christian Toetzke and Moritz Fürste, bought Infront’s majority stake in HYROX. Terms weren’t disclosed, but the deal carries a reported €600 million valuation. I wrote about it here.

The second is wearables. Garmin posted record third-quarter revenue of $1.99 billion, and it says its Fitness segment grew 16% on strong demand for wearables. I broke that down here. Garmin is buying the coaching layer, too, after it acquired TrainingPeaks and TrainHeroic in July.

The third is a caution flag. Oura postponed its Nasdaq IPO in September, citing uncertainty in the IPO market, even though the offering was reportedly about four times oversubscribed. I covered that here.

The pattern I see is money chasing in-person events, data and the platforms around them. Expensive hardware in your living room is still getting financed, but at a premium.

What I Tell Athletes About Big-Ticket Gear

As an endurance coach, I’m not anti-Peloton. I actually really like it and own the bike outright and love doing the strength classes. Plenty of athletes get work done on a bike or treadmill at home, especially in winter. And Peloton helps with that.

My advice on any big-ticket training equipment is the same: buy it for the training you’ll actually do, not the training you wish you’d do. The best machine is the one you’ll use on a Tuesday in January just as much in July.

My Thoughts

I don’t read this deal as a sign that connected fitness is back. I read it as a sign that Peloton, specifically, has become a business lenders can underwrite: big subscription margins, real cash and fewer bad bets.

And that’s finally a win for a company that was burning money not long ago. But an 8.6% coupon is the market asking Peloton to prove it, and both rating agencies still expect subscribers to decline.

Meanwhile, the momentum I can point to sits elsewhere: racing formats like HYROX, wearables like Garmin’s, and the coaching platforms that connect them are what everyone is paying for.

If Peloton’s new products turn the subscriber line around, I’d expect its next refinancing to come cheaper.

If they don’t, this rate may be as good as it gets.