Uber preps USD 1.5bn debut bond offering, sets call for tomorrow

by Farhin Lilywala, Paula Seligson and Anastasia Donde
 
 
Uber is working with Morgan Stanley on outreach related to raising around USD 1.5bn via an unsecured bond deal, said two buysiders and two trading sources.
 
 
The company has outlined a dual-tranche structure that includes an eight-year non-call three piece whispered at 8% and a five-year non-call two piece at 7.5%, two of the sources said. An investor call will take place tomorrow (10 October) at around noon to discuss the deal, two of the sources added
 
 
Some buysiders are comping a potential Uber debut bond deal to recent new issues from fellow early-stage businesses WeWork and Tesla.
 
 
WeWork placed a USD 702m 7.875% senior unsecured note due 2025 this past April. The bonds last traded at 96 to yield 8.686% on Friday (5 October), according to MarketAxess. Tesla’s USD 1.8bn 5.3% senior unsecured notes due 2025, priced in August 2017, traded today at 84.375 to yield 8.34%, down slightly from 85.5 on Friday (5 October).
 
 
Though Uber doesn’t currently have any high yield bonds, it has tapped the leveraged loan market – most recently in June for a repricing also led by Morgan Stanley. In that deal, the borrower repriced its USD 1.133bn TLB due 2023 to Libor+ 350bps (0% floor).
 
 
The term loan is quoted in the 100.275/100.725 context today, in line with recent levels, according to Markit.
 
 
Uber recently reached a USD 148m settlement agreement over allegations it concealed a 2016 data breach in violation of state laws.
 
 
TERMS:
•    Led by Morgan Stanley
•    USD 1.5bn senior unsecured notes offering
•    Eight-year, non-call three tranche whispered at 8%
•    Five-year, non-call two tranche whispered at 7.5%
•    Sector: technology
•    Business description: provides ride-hailing transportation software services
•    Privately owned
 
 
Representatives for Uber and Morgan Stanley, respectively, didn’t respond to inquiries.