US-based Uber, a rental car conglomerate, has reportedly raised 1.15 crores USD from the financial market for further expansion in global terms. The capital infusion in the company would boost growth thus outreaching accessibility in more countries.
On Thursday, Uber went further seeking leveraged loan getting an exclusive offer which previously given to premium establishments. The respective company deliberately took advantage of low-interest rate thus keeping venture capitalists on the positive notion and not diluting their equity. The leveraged loan market witnessed an increase in net volume amounting worth $783.30 billion in previous fiscal year. The whopping amount came as 13 times more than the investments accelerated by Venture Capitalists.
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Basically, a leveraged loan isextended to those companies or individuals that already have considerable amounts of debt. Lenders consider to carry a higher risk of default, and as a result, is costlier to the borrower. Leveraged loans for companies or individuals with debt tend to have higher interest rates rather than typical loans.
Uber, reportedly asked 4 banks to arrange leveraged loan worth 1 billion USD last year. This year the banks lent leveraged loan amount will yield almost 5% over the loan. Such crucial step was taken merely a month after when the rental car company withheld a fund raising worth $3.5 billion in Saudi Arabia. The sovereign wealth fund raising company valued at $62.5 billion got backed up by venture capitalist, which nonetheless happened to be single largest investment procedure of that particular fiscal year.