Uber Raises $1 Billion in Exchangeable Notes to Tap Autonomous Vehicle Market

Uber Technologies Inc. has launched a billion-dollar bond offering to investors, providing exposure to shares of autonomous vehicle firm Aurora Innovation Inc. The deal will give Uber the flexibility to exchange the notes for shares of Aurora or sell them for cash, offering a new way for the ride-hailing giant to tap into the rapidly growing autonomous vehicle market. The offering comes as Uber continues to invest in its self-driving capabilities and increase its presence in the transportation industry. The company will use the net proceeds from the deal for general corporate purposes, including potential strategic investments in the autonomous vehicle space.

Key Takeaways:

• Uber has priced $1 billion in 0% exchangeable senior notes due 2028, offering investors exposure to Aurora Innovation Inc. shares.
• The notes will be exchangeable for cash, Aurora shares, or a combination of both at Uber's discretion.
• Each $1,000 note will initially be exchangeable for 117.6471 Aurora shares, representing an implied price of $8.50 per share.
• The deal includes an option for the initial purchaser to buy an additional $150 million in notes.
• The notes will be secured by a first-priority lien on shares of Aurora common stock held by Uber subsidiary Neben Holdings LLC.
• Neben will guarantee the notes on a limited recourse basis.
• Uber may redeem the notes after May 21, 2027, if the value of Aurora stock rises at least 30% above the exchange price for 20 out of 30 trading days.
• The company estimates net proceeds of around $978.9 million, or up to $1.13 billion if the full overallotment is exercised.
• Proceeds will be used for general corporate purposes, potentially including strategic investments in the autonomous vehicle space.
• Uber will use the notes to increase its exposure to the autonomous vehicle market alongside its ongoing investments in self-driving capabilities.

Statistics:

• Market value of the bond offering: $1 billion
• Implied price of Aurora shares per exchangeable note: $8.50
• Net proceeds from the deal: around $978.9 million (up to $1.13 billion with the full overallotment)
• Exchange rate: 117.6471 Aurora shares per $1,000 note
• Redemption condition: 30% increase in Aurora stock value above the exchange price for 20 out of 30 trading days
• Maturity date: May 15, 2028
• Redemption date: May 21, 2027 (if conditions are met)

Sources:

• [Alliance News]: "Uber Raises $1 Billion in Exchangeable Notes to Tap Autonomous Vehicle Market"
• [Uber Technologies Inc.]: "Uber Raises $1 Billion in Exchangeable Notes to Tap Autonomous Vehicle Market"
• [Eva Castanedo, Alliance News reporter]: "Uber shares were down 1.0% at $90.82 during premarket trading in New York on Wednesday."