(Bloomberg) -- Uber Technologies Inc. boosted the size of its planned convertible bond issue to $1.5 billion, signaling strong demand among investors.

The ride-hailing giant priced the offering with a 0.875% coupon, according to a statement, near the bottom of a marketed range. The company set a conversion premium of 32.5% at the top of the range. The announcement confirmed an earlier report by Bloomberg News.

With a market value of $113 billion, Uber is the largest company to tap the convertible bond market this year. Its latest move takes advantage of the recent decline in interest rates, as the market increasingly believes the Federal Reserve’s rate hike cycle is over. 

It also seizes on a wave of optimism around the company after it reported its second-consecutive profitable quarter earlier this month. Uber’s stock has climbed 27% since the end of October, as the company also seeks to create additional revenue drivers with new services.

If the option to sell an additional 15% of the base deal is exercised, Uber’s issue would be tied for the largest convertible bond offering of the year with Rivian Automotive Inc.’s October offering and Southern Co.’s February issue.

Uber had originally sought to raise $1.2 billion at a coupon range of 0.75% to 1.25% and at a 27.5% to 32.5% conversion premium.

For an issuer with a long-term rating of BB- with a positive outlook from S&P Global Ratings, the borrowing terms of Uber’s offering are significantly cheaper than expected. The favorable pricing comes as US convertible bond volume, despite returning to near pre-pandemic normality, has disappointed those expecting a renaissance this year.

When the deal closes, the company’s ability to raise additional financing in the current interest-rate environment, and to use the proceeds to redeem $1 billion in outstanding 2025 notes that carry a 7.5% coupon, will further improve its credit outlook. 

Although the potential for upgrades to Uber’s ratings are more biased toward 2025 rather than next year, “it appears a matter of when, not if,” Bloomberg Intelligence senior credit analyst Robert Schiffman wrote in a note Monday.

Uber’s liquidity, access to low-cost capital and improving fundamentals suggest that its credit ratings could keep climbing over the next 12 to 24 months, Schiffman had said in August.

(Updates with details from official statement)

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