Uber has reportedly secured a $1.15 billion leveraged loan arranged by four banks, with Morgan Stanley leading. It's believed the ridesharing giant will pay a yield of about 5%. Uber has been highly active on the fundraising trail so far in 2016, completing a $3.5 billion equity raise from Saudi Arabia's Public Investment Fund in May, one of the largest private investments ever made in a VC-backed company.
Much of the cash Uber's raising will be put to work growing its business in China, where the company is battling Didi Chuxing for market share and losing an estimated $1 billion each year. But Uber also needs cash for its mounting legal challenges, varying from local drivers hoping to set up unions to cities challenging the legality of its business model.
The loan itself is part of an emerging trend within the unicorn ranks. As the companies stay private longer, debt could be the chosen avenue for many to raise more funds.