Grab raises $2b term loan facility, the “largest” in Asia’s technology sector

Southeast Asian ride-hailing and payments giant Grab has secured $2 billion for its first senior secured term loan facility, making it the largest term loan B facility in the Asian technology sector, according to an announcement Monday.

The amount raised was higher than the initial $750 million that Grab had targeted for the five-year senior secured loan. The company attributed the upsizing of the debut term loan to commitments from international institutional investors. Grab CEO and co-founder Anthony Tan said the app continues to make “consistent progress in achieving our growth and sustainability milestones”.

DealStreetAsia had earlier reported that the loan will be a revolving credit facility with a three- or five-year tenor and a 5-6% interest rate. A revolving loan is a flexible financing tool due to its repayment and re-borrowing accommodations, allowing a business to borrow money as needed for working capital needs and continuing operations.

Grab said the term loan will further enhance the company’s position as it continues to strengthen its super app ecosystem. It will also allow Grab to diversify its finances.

The interest rate on the loan was lowered by 100 basis points from the original launch guidance to LIBOR + 450 basis points, Grab said. LIBOR, or the London inter-bank offered rate is the benchmark interest rate at which major global banks lend to one another.

Moody’s Investors Services and S&P Global Ratings issued ratings of B3 and B-, with a stable outlook, respectively on Grab’s term loan.

The term loan facility, however, is not a first for Grab. In 2017, the company secured $700 million in debt financing, including a $500 million five-year asset-backed syndicated facility from HSBC Singapore.

The deal was 2.5 times oversubscribed, with 16 banks and non-bank financial institutions participating.

The successful close of the term loan facility comes as Grab is reportedly exploring a listing in the US this year. Sources interviewed by Reuters said the IPO could raise at least $2 billion, making it the largest overseas share offering by a company minted in Southeast Asia.

The term loan also comes as a confidence booster for Grab, which wants to show it can continue to raise capital as analysts point to the setbacks it could face in certain markets. For one, merger talks with the Indonesian ride-hailing rival Gojek have been called off, which could put a dent in Grab’s broader ambitions for Southeast Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.