Author Topic: Uberís Junk Bond Is an Entree to the Main Event  (Read 90 times)


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Uberís Junk Bond Is an Entree to the Main Event
« on: October 11, 2018, 05:00:34 PM »
High-yield issue is a way for the ride-sharing company to let potential equity investors get comfortable ahead of an expected IPO.

Uber Technologies Inc. is taking the next logical step toward becoming a grownup company ahead of a potential IPO next year. After selling a seven-year leveraged loan for $1.5 billion in March, it is now readying itself to issue junk bonds for a similar amount (at five-year and eight-year maturities.)

This doesnít look like a major debt-raising exercise, more a warm-up ahead of the main IPO event ó allowing those coveted investors to get more comfortable on due diligence. There will no doubt be demand from potential equity investors looking to build a relationship with the company ahead of the IPO allocations.

The ride-hailing company may offer $500 million of five-year notes and $1 billion of eight-year bonds, according to people familiar with the matter who asked not to be named because the deal is private.
The shorter-term notes, which the company canít buy back for two years, may yield about 7.5%, and the longer-dated securities, which canít be bought back for three years, may yield around 8%, the people said.
The transaction is a private placement, and Morgan Stanley is lead placement agent, one of the people said. A spokesman for Uber declined to comment, and a spokesman for Morgan Stanley didnít immediately comment. Debtwire earlier reported on the planned offering.

The bond sale may come as early as next week. It is being offered as fixed-income investors have proven receptive to debt deals backed by cash-burning technology companies