With novel marketing, Uber attempts to place $1.5 billion two-part notes offer private-style

By Paul A. Harris

Portland, Ore., Oct. 11 – Uber Technologies Inc. plans to sell $1.5 billion of high-yield notes in two tranches, market sources say.

The deal is expected to price during the Oct. 15 week.

Although the market anticipates the bonds will come with “triple hooks” – triple C ratings from both Moody's Investors Service and S&P Global Ratings – there is a possibility that S&P will come with a B- rating, instead, a trader said Thursday.

Despite the deal size and the anticipated ratings, the notes are being marketed private placement-style, with the dealer circling up select accounts, sources say. Offering documents have not been widely circulated, and dealer updates have not been forthcoming.

The deal includes a $500 million tranche of five-year notes, which come with two years of call protection and are in the market with initial talk in the 7˝% area, and a $1 billion tranche of eight-year notes with three years of call protection and initial talk in the 8% area.

The close-to-the-vest execution notwithstanding, the deal is heard to be going well and is expected to come upsized, with both tranches eventually pricing tighter than the initial guidance.

Word in the market is that it will ultimately be taken down by a handful of accounts, a trader said on Thursday.

Morgan Stanley & Co. LLC is leading the offering. An informed source there declined to comment.

In part, Uber’s novel execution is being chalked up to the San Francisco-based ridesharing company's unorthodox manner of doing business, source say.

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