Grab raises US$2B term loan to diversify financing sources
Southeast Asian tech giant Grab announced today it has raised US$2 billion from its first term loan, after securing commitments from international institutional investors. According to a press release by the Singapore-based giant, this marked the largest institutional debt in Asia’s technology sector.
Grab shared the five-year senior secured loan was upsized from the original principal amount of US$750 million after strong interest from investors. It also noted the interest rate on the loan was lowered by 100 basis points from the original launch guidance to 450 basis points over LIBOR (the benchmark interest rate at which major global banks lend to one another).
The ride-hailing and food delivery giant commented proceeds from the term loan will enable it to “strengthen its liquidity” by further enhancing its “well-capitalised position”. This comes as Grab made clear of its intention to continue strengthening its super app ecosystem within Southeast Asia.
Besides, the term loan serves to diversify the company’s financing sources and “establish a long-term, diversified capital structure”.
Anthony Tan, group CEO and Co-founder of Grab noted the trust investors have placed in Grab as they “continue making consistent progress in achieving our growth and sustainability milestones.”
Valued at over US$16 billion, Reuters reported Grab is looking at a potential US IPO this year, amidst an increased appetite of investors for tech companies. Last month, the group’s fintech arm raised US$300 million in Series A funding, led by Korean asset management company Hanwha Asset Management
In conjunction with the term loan, Moody’s Investors Services and S&P Global Ratings issued to Grab ratings of B3 and B-, with a stable outlook, respectively. The ratings made Grab the first independently-rated technology company in Southeast Asia.
JP Morgan served as the lead bookrunner on the loan facility while Barclays, Deutsche Bank, HSBC, Mizuho, MUFG and Standard Chartered acted as joint bookrunners.
Recently, Grab also became one of the companies that have secured the digital banking license approval in Singapore.