According to sources familiar with the matter at hand, Airbnb Inc’s latest $1 billion investment from private equity firms Silver Lake and Sixth Street Partners has terms that imply a reduced valuation for the home rental company.

According to a source, “Sixth Street and Silver Lake received warrants that can be exercised at an $18 billion valuation, below the $26 billion Airbnb was valued in early March in its internal valuation”.

The deal, seen by investors, as positive signs as it comes at a time when global travel is at a stand still.

According to sources, Airbnb will terminate its $1 billion credit facility following the investment.

“The deal is comprised of $1 billion in five-year debt yielding 11% to 12% and warrants that can convert into stock equating to a little over 1% of Airbnb’s total equity,” said sources while requesting anonymity since the terms are confidential.

Following the deal, Airbnb’s cash reserves rose to around $4 billion.

In March, Airbnb had held a phone meeting to discuss extending an existing $1 billion debt facility, which was led by Bank of America.

In its most recent private fund raising round, Airbnb was valued at $31 billion.

According to one of the sources, Silver Lake is targeting a valuation for Airbnb at $40 billion to $50 billion in order to hit its return target, while declining to provide more details.

Bank of America, Airbnb, Sixth Street and Silver Lake, declined comment.

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