PALO ALTO, CA (Fri, Mar. 09) – Social networking website Facebook, has secured credit deal worth $8 billion from a consortium of banks ahead of the social network's eagerly anticipated initial public offering (IPO).
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| Social networking giant signs $8 billion credit deal with onsortium of banks |
According to documents submitted Wednesday with the Securities and Exchange Commission (SEC); Facebook had secured a $5 billion revolving line of credit over three years from a bank consortium including Morgan Stanley, JP Morgan, Goldman Sachs and Bank of America-Merrill Lynch.
Sources in Facebook revealed that the company aims use the facility "for general corporate purposes." In the wake of new arrangement Facebook has terminated the credit facility agreement inked with Barclays Capital and others that granted the company the borrowing capacity of $2,500 million.
The social networking giant also said it had reached a deal with the same group for a $3 billion bridge credit facility to enable it to fulfill a number of obligations related to the initial public offering (IPO).
Sources in Facebook revealed that the company aims use the facility "for general corporate purposes." In the wake of new arrangement Facebook has terminated the credit facility agreement inked with Barclays Capital and others that granted the company the borrowing capacity of $2,500 million.
The social networking giant also said it had reached a deal with the same group for a $3 billion bridge credit facility to enable it to fulfill a number of obligations related to the initial public offering (IPO).
“This bridge credit facility allows us to borrow up to $ 3 billion to fund tax withholding and remittance obligations related to the settlement of RSUs (Restricted Stock Units) in connection with our initial public offering,” Facebook filing said.
In early February, Facebook filed for its IPO aiming to raise at least $5 billion in the largest stock flotation ever by an Internet company; but figure could grow to $10 billion depending upon the interest of investors.
The Palo Alto, California-based company, founded by Mark Zuckerberg eight years ago when he was just 19, reported net income of $668 million last year, up from $372 million the previous year.
In the documents filed Wednesday, Facebook also said it had now total of 31 underwriters after adding 25 to the existing six ahead of its IPO, expected later this year.
Facebook's value has been estimated at $75 billion to $100 billion.
In early February, Facebook filed for its IPO aiming to raise at least $5 billion in the largest stock flotation ever by an Internet company; but figure could grow to $10 billion depending upon the interest of investors.
The Palo Alto, California-based company, founded by Mark Zuckerberg eight years ago when he was just 19, reported net income of $668 million last year, up from $372 million the previous year.
In the documents filed Wednesday, Facebook also said it had now total of 31 underwriters after adding 25 to the existing six ahead of its IPO, expected later this year.
Facebook's value has been estimated at $75 billion to $100 billion.
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