Uber Is Said to Seek Lower Rate on Leveraged Loan Raised in 2016

(Bloomberg) -- Just two months after successfully raising $1.5 billion in the leveraged loan market, Uber Technologies is back to lower the rate on an earlier financing, according to people with knowledge of the matter.

The ride-hailing company began approaching lenders to the lower interest on a $1.13 billion loan it raised two years ago, said the people, who asked not to be identified because the information isn’t public. Morgan Stanley, the bank which arranged the 2016 financing, has scheduled a May 31 call with lenders to review the transaction and offer more details.

The loan, which is being repriced, matures in 2023 and pays 400 basis points more than Libor, according to data compiled Bloomberg. That’s the same rate on Uber’s March loan, which is due in 2025. The new loan was unique because Uber raised it directly from investors, instead of asking a bank to arrange the financing.

Uber this month recorded a $2.5 billion quarterly profit, but only on paper after accounting for the value of selling its Southeast Asian business to Grab and its Russian business to Yandex. Without those sales, the San Francisco company had a loss of $312 million before interest, taxes and other expenses.

But those figures have done nothing to deter credit investors. In March, the issuer’s self-syndicated term loan was two and a half times oversubscribed. Demand also cleared the way for the company to boost the size of the financing from an original $1.25 billion and lower the yield.

An Uber representative declined to comment. A Morgan Stanley representative didn’t respond to a request for comment.

©2018 Bloomberg L.P.