Uber Raises $4 Billion In First Bond Sale as Blue-Chip Firm

Caleb Mutua
2 min read

In This Article:

(Bloomberg) -- Uber Technologies Inc. tapped the US investment-grade bond market for the first time since it attained blue-chip status.

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The ride hailing service sold $4 billion of bonds in three parts, according to a person with knowledge of the matter. The longest portion of the offering, a 30-year security, priced at 1.3 percentage point above Treasuries after initial discussions of around 1.6 percentage point, said the person, who asked not to be identified as the details are private.

Early indications of demand reached about $8 billion following investor calls Tuesday, according to people with knowledge of the matter. Morgan Stanley, BofA Securities Inc. and JPMorgan Chase & Co. managed the bond sale.

Uber didn’t respond to a request for comment. Representatives for BofA, JPMorgan and Morgan Stanley declined to comment.

The company’s record profitability in the second quarter, double-digit bookings and top-line growth were among the reasons for the deal’s attractiveness, according to Bloomberg Intelligence analyst Robert Schiffman. “Rapidly improving free cash flow trends should continue to propel Uber’s ratings higher over the next few years,” he added.

Uber intends to use the proceeds from the offering to repay about $1.97 billion of outstanding loans as of the end of June and to use the remainder to redeem $1.5 billion worth of 8% senior notes due 2026 and for general corporate purpose, said the people.

The company’s credit rating was first upgraded on Aug. 16 to BBB- by S&P Global Ratings from BB+. Fitch Ratings days later assigned Uber a BBB grade and on Aug. 27 Moody’s Ratings also raised the firm to investment grade.

--With assistance from Brian Smith.

(Adds pricing details in the second paragraph.)

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