Form 4: Uber Sells $1.15 Billion in Exchangeable Senior Notes Due 2028

Uber Technologies sold $1.15 billion in exchangeable senior notes due 2028 in a private placement.

Summary

• Uber Technologies, Inc. sold $1,150,000,000 aggregate principal amount of its 0.0% exchangeable senior notes due 2028 (the 'Notes') on May 20, 2025.
• The sale was conducted as a private placement pursuant to Rule 144A to an investment bank acting as initial purchaser.
• The notes were issued under an indenture dated May 20, 2025, among Uber, its subsidiary Neben Holdings, LLC, and a trustee.
• The notes are exchangeable into cash, shares of Class A common stock of Aurora Innovation, Inc., or a combination thereof, at Uber's election.
• The initial exchange rate is 117.6471 shares of Aurora Class A common stock per $1,000 principal amount of notes, equivalent to approximately $8.50 per share.
• The notes are immediately exchangeable, subject to the terms and conditions of the indenture.
• The exchange rate is subject to adjustment in certain events, including corporate events or a notice of redemption.
• Holders can require Uber to repurchase the notes for cash at 100% of the principal amount plus accrued interest if certain fundamental changes occur, such as an 'Uber fundamental change', an 'Aurora fundamental change', or a 'share ownership event'.

Sentiment

Score: 6

Explanation: The announcement is neutral. It describes a financial transaction. The sentiment is slightly positive as it provides Uber with additional capital, but there are also potential obligations associated with the notes.

Positives

• Uber has secured a significant amount of capital ($1,150,000,000) through the issuance of these notes.
• The exchangeable feature of the notes provides Uber with flexibility in managing its capital structure and potential dilution.
• The private placement allows Uber to access capital markets efficiently.

Negatives

• The notes carry an obligation for Uber to potentially deliver cash or shares of Aurora Innovation, Inc. Class A common stock upon exchange.
• The exchange rate is subject to adjustment, which could impact the number of shares Uber may need to deliver.
• Certain fundamental changes could trigger a repurchase obligation for Uber at 100% of the principal amount, potentially impacting cash flow.

Risks

• The value of Aurora Innovation, Inc. Class A common stock could fluctuate, impacting the cost to Uber if it elects to deliver shares upon exchange.
• The occurrence of an 'Uber fundamental change', 'Aurora fundamental change', or 'share ownership event' could trigger a costly repurchase obligation.
• Changes in market conditions or Uber's financial performance could impact the trading value of the notes.

Future Outlook

The notes are immediately exchangeable, and the exchange rate is subject to adjustment in certain events. Uber may be required to repurchase the notes under certain fundamental change scenarios.

Industry Context

The issuance of exchangeable senior notes is a common financing strategy for companies seeking to raise capital while providing investors with potential upside through equity conversion. This type of financing is often used by companies with a strong growth outlook but may not yet be generating significant profits.

Comparison to Industry Standards

• Issuing exchangeable notes is a common practice among tech companies like Uber. For example, Tesla has issued convertible notes in the past to fund its growth initiatives.
• The initial exchange price of approximately $8.50 per share for Aurora Innovation, Inc. Class A common stock will be compared to the market price of Aurora's stock at the time of exchange to determine the value to noteholders.
• The terms of the indenture, including the conditions for repurchase upon fundamental changes, are standard in similar note offerings.

Stakeholder Impact

• Shareholders: Potential dilution if notes are exchanged for shares.
• Noteholders: Opportunity for potential upside through equity conversion.
• Aurora Innovation, Inc.: Potential impact on its stock price due to the exchange of notes for shares.

Key Dates

Keywords

exchangeable senior notes, Uber, Aurora Innovation, private placement, Rule 144A, debt, financing, securities