Singapore’s Grab said it has closed on a $2 billion, five-year term loan facility amid speculation that it is readying an initial public offering.
Grab said the loan facility was upsized from an original principal amount of $750 million due to keen investor interest, adding it was the biggest term loan B facility in the Asian tech sector.
The ride-sharing, delivery services and financial services company said the loan will allow it to diversify its funding sources and capital structure, along with strengthening liquidity. The interest margin rate for the loan is LIBOR plus 450 basis points, 100 basis points lower than the originally proposed terms.
“I am deeply encouraged by the trust placed in us by investors who believe in our mission and recognize the value of our super app platform, as we continue making consistent progress in achieving our growth and sustainability milestones,” said Grab Co-Founder and Group CEO Anthony Tan, in a statement.
“With their support, we will invest in building a long lasting, multi-local services business, so that millions of Southeast Asians can support their families and improve their lives with our everyday services,” Tan added.
J.P. Morgan served as lead bookrunners for the deal, with Barclays, Deutsche Bank, HSBC, Mizuho, MUFG and Standard Chartered as joint bookrunners.
On Jan. 25, Bloomberg reported that Grab has chosen Morgan Stanley and J.P. Morgan Chase as underwriters for a possible initial public offering that could be worth $2 billion. Sources told Bloomberg the IPO could happen in the second half of 2021.
Grab said Monday (Feb. 1) that Moody’s Investor Services has issued the company a B3 rating, while S&P Global Ratings has rated the company a B-, with stable outlook. Grab added it is the first Southeast Asian tech company to be independently rated.
Grab was last valued at $14.3 billion, according to Nikkei Asia, which cited CB Insights.
Nikkei Asia added that while Grab’s ride-hailing business was hit hard by the pandemic, demand for its delivery services has surged, with the company reporting that revenue has now surpassed pre-pandemic levels.
Earlier this month, Grab’s financial services unit, Grab Financial Group, said it raised over $300 million in a Series A funding round led by Hanwha Asset Management. The round was joined by K3 Ventures, GGV Capital, Arbor Ventures, and Flourish Ventures.
Grab said it planned to use the Series A investments to expand its workforce and offerings in Southeast Asia.