Uber Upsizes Convertible Note Offering to $1.5 Billion

Published 1 hours agoUBER

Uber Upsizes Convertible Note Offering to $1.5 Billion

Uber Technologies Inc. has announced a significant change in its funding strategy, increasing the size of its convertible bond offering from $1.2 billion to $1.5 billion. These 0.875% Convertible Senior Notes will be due in 2028, allowing investors the option to convert the notes into common stock at a rate equivalent to $72.54 per share, a 32.5% premium over the stock price recorded on November 20, 2023.

The net proceeds from this offering will be partially allocated, about $122.25 million, to finance capped call transactions. The remainder aims to manage existing debts, including redeeming Uber’s outstanding $1 billion senior notes that carry a 7.500% interest rate and are due in 2025. The new notes provide flexibility, as Bloomberg reported: should there be a significant rise in Uber's stock price, these notes may be redeemed under specific conditions starting December 2026.

Uber is negotiating capped call transactions as part of this deal to potentially minimize the impact on its stock and handle any required excess cash payments for converted notes. This structured financial move underscores Uber's efforts to optimize its capital management and supports its strategic goals of maintaining financial flexibility and strengthening its financial outlook.

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