This example shows that every deal does not need to be perfectly wrapped with a bow on it. Uber has a vision, and these former Goldman executives shared the vision with investors and were extremely successful. -Mike Shustek
(BLOOMBERG) Uber Technologies Inc. has found a way to tap debt markets when burning through billions of dollars of cash: Keep financial details closely guarded and hire former Goldman Sachs bankers to oversee the deals.
The ride-hailing company this week sold $2 billion of bonds in what’s known as a private placement. The secretive approach, bypassing Wall Street’s broader bond market, allowed Uber to limit the financial information it disclosed — and then only to a small and select group of buyers. That kept prying eyes away from the books of a firm that is still losing money as it expands globally.
And, while a lack of transparency generally can make it difficult to gauge creditworthiness, it seemed to work. So many orders poured in that Uber boosted the size of the offering, its first ever in the bond market, to $2 billion from $1.5 billion. The yield, 8 percent on one portion of the bonds, is a relatively small premium to what public companies are paying in the junk-bond market.