Facebook Unveils Five-Year $6.5 Billion Credit Line in New Pact
Facebook Inc. (FB), owner of the world’s most popular social-networking service, unveiled a new $6.5 billion credit line that replaces two separate facilities for borrowing money in the same amount.
The Menlo Park, California-based company terminated a previously held $5 billion revolving credit facility that it hadn’t drawn down, according to a regulatory filing today. Facebook also had a $1.5 billion loan facility -- used for paying taxes tied to its 2012 initial public offering -- that it recently repaid, the company said.
The new five-year credit facility will be used to fund “working capital and general corporate purposes,” with interest at the London Interbank Offered Rate, or Libor, plus 1 percent. JPMorgan Chase & Co. (JPM) is the administrative agent for the new credit line, as well as the previous facility and loan.
Facebook is streamlining its access to credit as it strengthens its financial performance. The company last month said second-quarter sales rose 53 percent to $1.81 billion, topping analysts’ estimates of $1.62 billion.
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