Uber Technologies Inc. is finalizing a $2 billion credit line,
people familiar with the matter said, in a deal that underscores
Wall Street's enthusiasm for the ride-sharing company's
prospects.
San Francisco-based Uber initially sought a $1 billion credit
facility from six to seven banks, The Wall Street Journal reported
last month.
But more banks wanted to be included, and some banks were game
to put up heftier sums, the people said.
The five-year facility, known as a revolver, is being priced a
half-percentage point lower than an already competitive rate
initially discussed, the people said.
Morgan Stanley is leading the arrangement of the deal, they
said. Other banks involved are Bank of America Corp., Barclays PLC,
Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., HSBC
Holdings PLC, J.P. Morgan Chase & Co. and SunTrust Banks
Inc.
Securing a credit line from Wall Street often signals the early
stages of preparation for an initial public offering, as it helps a
company cement relationships with banks. An Uber IPO isn't
imminent, people familiar with the matter have said previously.
Companies often reward banks that make big credit commitments
with roles on their IPO, which is why banks sometimes are willing
to offer better-than-standard terms on the loans.
Uber has already checked off a number of boxes heading to an
initial public offering, including achieving a $41 billion
valuation in a recent fundraising round and a sale of convertible
debt to investors whose value is tied in part to a future offering
price.
The company has been in talks to raise a new funding round that
would value it at $50 billion or more, the Journal has
reported.
Other technology companies to arrange credit lines before IPOs
include Facebook Inc., Twitter Inc. and Alibaba Group Holding
Ltd.
The credit facility isn't needed to fund Uber's day-to-day
business, people familiar with the deal have said previously.
Write to Gillian Tan at gillian.tan@wsj.com and Telis Demos at
telis.demos@wsj.com
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