The tide is high
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Weekly Digest
Uber, the popular US ride-hailing company, is best known for its cheap, reliable and fast service, and not for the leveraged balance sheet it has built up over its lifetime. Uber’s earnings remain in negative territory and it relies on debt finance to support its growth. Earlier this year, Uber successfully raised $1.5 billion from its second issuance of high-yield loans with strong investor demand pushing up the loan size from the initial offering of $1.25 billion. At a time of high demand, tight spreads, low default rates and weak lending standards, what might this tell us about the US credit landscape today and have we now reached a tipping point?
