(Bloomberg) -- Uber Technologies Inc. is sounding out investors on Tuesday for its potential first investment-grade bond sale.
The ride hailing service has scheduled fixed income investor calls between 9 a.m. and 3:30 p.m. New York Time, according to a person with knowledge of the matter. Morgan Stanley, BofA Securities Inc., and JPMorgan Chase & Co. will arrange the calls, said the person, who asked not to be identified as the details are private. A senior unsecured bond sale could follow.
Uber did not immediately reply to a request for comment.
The company’s debt was first upgraded on Aug. 16 to BBB- by S&P Global Ratings from BB+, then rated BBB by Fitch Ratings a few days later, and on Aug. 27 was raised to investment-grade at Moody’s Ratings.
Investment-grade credit ratings can translate to lower borrowing costs for a company, because a wider array of investors are eligible to buy high-grade securities. Upgrades to blue-chip status can also allow companies to refinance existing higher yielding junk bonds with new lower-cost investment-grade bonds.
Uber’s financial position may be “the strongest ever,” with record second-quarter profitability, double-digit bookings and top-line growth, wrote Bloomberg Intelligence senior credit analyst Robert Schiffman.
“Free cash flow is expected to approach $10 billion in 2026, a lofty level considering the company never generated excess cash until 2022,” Schiffman added.
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