WeWork Cos., a co-working space company backed by SoftBank Group Corp., is selling bonds as the New York-based startup continues its rapid expansion.

The company becomes the latest high-flying tech company with grand plans, but scant real cash flow, asking lenders to pony up money. Uber Technologies Inc. in March sought a loan even while burning through cash and posting an annual loss. Netflix Inc. borrowed US$1.9 billion on Monday after allaying cash-burn concerns with continued subscriber growth.

WeWork is issuing US$500 million of seven-year senior unsecured bonds, according to a person with knowledge of the matter. The proceeds will be used for general corporate purposes and are expected to price April 26, the person said, asking not to be identified as the details are private. The company declined to comment.

Revenue totaled US$886 million in 2017, according to bond documents seen by Bloomberg. That compares to operating lease commitments of US$706 million for 2018, the documents show. WeWork generated US$244 million of cash from operations last year while burning through US$1.5 billion in investments. WeWork had 234 locations locations across 22 countries as of March 1, the documents show.

WeWork is making its first trip to the bond market since its 2010 founding. The startup agreed to a US$4.4 billion investment from Japan’s SoftBank and its Vision Fund in August, which increased the company’s valuation to about US$20 billion at the time. That financing allowed some shareholders to cash out, as well as advance an aggressive global expansion that has most recently picked up steam in Japan.

The company has begun purchasing buildings as it seeks to diversify its global portfolio of short-term co-working spaces, which are mainly leased from landlords on long-term rental agreements. Along with two partners, WeWork paid about 580 million pounds (US$810 million) for an office complex in the City of London district, two people with knowledge of the deal said. The company will own 10 percent of Devonshire Square Estate, while TH Real Estate and Denmark’s PFA Ejendomme A/S will hold 45 percent each, one of the people said.

Earlier this month, WeWork bought Chinese co-working startup Naked Hub as part of a continued expansion in the world’s most populous country. It paid about $400 million for the three-year-old Chinese business, according to two people familiar with the matter.

S&P Global Ratings grades the company B, five steps below investment, with a stable outlook. The new notes are rated one step higher at B+. Fitch Ratings assigned the company a rating of BB-, three steps into junk.

"As a company in a sustained growth mode, WeWork is not profitable on a combined basis, as significant growth operating expenses more than offset existing property cash flows," Fitch said.

WeWork could significantly increase the size of the bond sale based on investor demand, which is currently being marketed to U.S. investors, the Financial Times reported Monday, citing five people with knowledge of the planned sale.

JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc, Morgan Stanley, UBS Group AG and Wells Fargo & Co. are managing the sale, the person said. The banks are holding an investor call Tuesday at 11 a.m. New York time.