| Item 1.01 | Entry into a Material Agreement. |
On September 17, 2019, Uber Technologies, Inc. (the “Company”), completed its previously announced private offering of $1.2 billion aggregate principal amount of 7.500% Senior Notes due 2027 (the “Notes”) to several investment banks acting as initial purchasers (collectively, the “Initial Purchasers”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), who subsequently resold the Notes to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act and in offshore transactions tocertain non-U.S. persons in reliance on Regulation S under the Securities Act.
The net proceeds from this offering were approximately $1,189 million, after deducting the Initial Purchasers’ discounts and commissions and the estimated offering expenses payable by the Company. The Company expects to use the net proceeds from this offering primarily to pay a portion of the purchase price in connection with the closing of the Company’s pending acquisition of Careem Inc.
As of the issue date, one of the Company’s subsidiaries, Rasier, LLC (“Rasier”), has guaranteed the Notes. All of the Company’s domestic restricted subsidiaries that are or become borrowers or guarantors under that certain Term Loan Agreement, dated as of July 13, 2016 (as amended), among the Company, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, will be required to guarantee the Notes. The Notes and the guarantees are the Company’s and the guarantors’ general unsecured senior obligations and are effectively subordinated to all of the Company’s and the guarantors’ existing and future secured obligations, to the extent of the value of the assets securing such obligations. The Notes and the guarantees rank equal in right of payment to all of the Company’s and the guarantors’ existing and future unsecured, unsubordinated obligations, rank senior in right of payment to all of the Company’s and the guarantors’ future subordinated obligations that are expressly subordinated to the notes, if any, and are structurally subordinated to any existing and future obligations of any of the Company’s subsidiaries that are not guarantors.
The Notes were issued pursuant to an indenture, dated September 17, 2019 (the “Indenture”), among the Company, Rasier and U.S. Bank National Association, as trustee (the “Trustee”). The Notes will mature on September 15, 2027, unless earlier redeemed or repurchased. The Notes will bear interest from September 17, 2019 at a rate of 7.500% per year, in each case payable semiannually in arrears on March 15 and September 15 of each year, commencing on March 15, 2020.
The Company may redeem some or all of the Notes on or after September 15, 2022 at specified redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, the Company may redeem some or all of the Notes at any time prior to September 15, 2022, at a price equal to 100% of the aggregate principal amount of the Notes being redeemed, plus a make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time prior to September 15, 2022, the Company may also redeem up to 40% of the aggregate principal amount of the outstanding Notes with the proceeds from certain public equity offerings at a redemption price of 107.500% of the aggregate principal amount of the Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Within 30 days following any “Change of Control Triggering Event” (as defined in the Indenture), the Company will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount of the Notes on the date of repurchase, plus accrued and unpaid interest, if any, to, but excluding, the change of control payment date.
The Indenture contains covenants that will limit the ability of the Company and certain of its domestic subsidiaries to, among other things:
| | • | | enter into, create, incur or assume certain liens; |
| | • | | in the case of certain of the Company’s domestic subsidiaries, create, assume, incur, guarantee or otherwise become liable for additional indebtedness without such subsidiary guaranteeing the Notes on an unsecured unsubordinated basis; |
| | • | | in the case of the Company and certain of its domestic subsidiaries, enter into any sale and lease-back transaction of certain property; and |
| | • | | consolidate or merge with or into, or sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of the Company’s assets on a consolidated basis to another person. |
In addition, at any time the Notes are rated investment grade and no Default or Event of Default under the Indenture shall have occurred and be continuing, the Company may, at its option, cause the guarantees, if any, to be released and certain covenants to be suspended for the remaining term of the Notes (or until the Notes are no longer rated investment grade or an Event of Default shall have occurred and be continuing under the Indenture).
