From the Wall Street Journal:
Loan would bring to some $15 billion the funds the cash-hungry ride-sharing firm has raised
Uber Technologies Inc. is turning to the so-called leveraged-loan market for the first time to raise as much as $2 billion, in a sign of the popular ride-sharing network’s hunger for cash as it expands around the world.*From Dec. 3's "Uber To Raise $2 Billion In Round Valuing Company at One Trillion Dollars":
Uber has hired Morgan Stanley and Barclays PLC to sell a so-called leveraged loan of $1 billion to $2 billion to institutional investors, people familiar with the matter said. The company plans to issue the debt in coming weeks, some of the people said. There is no guarantee the deal will take place.
The move comes on the heels of Uber’s sale of a $3.5 billion equity stake to the investment arm of Saudi Arabia—part of a $5 billion funding round that was the largest single injection into a venture-backed company—and underscores the cost of its quest for global market share. The new loan would bring to roughly $15 billion the amount raised in debt and equity by Uber, which has been valued at $68 billion.
Uber is hoping to price the loan with a yield of 4% to 4.5%, some of the people said, but it is unclear whether the company will achieve a rate that low, especially given it is a first-time issuer. The average yield on new leveraged loans ranges from 3.9% to 5.5%, according to data from S&P Capital IQ LCD.
It is unclear what exactly the use of the new funds would be, but Uber spends millions of dollars to attract riders and drivers, especially in less-established markets. It offers cash bonuses to new drivers and subsidizes the cost of lower-priced rides. The company has said it is profitable in its most developed markets....MORE
...Leveraged loans are a private variant of junk bonds. Banks make the loans to companies with below-investment-grade credit ratings and offload them to professional investors such as mutual funds, hedge funds and insurance companies. Issuers of the loans don’t need to publicly report financial information because the debt is sold privately to investors who are thought to be more sophisticated....
Okay, not a trillion but for some reason I can't get Dr. Evil* out of my head.
Back in simpler times, October 25, 2015, we posted "Uber Said to Plan Another $1 Billion in Fund-Raising" with the intro:
It almost makes you wonder: What is their burn rate up to?
