Facebook (FB) to Boost $2.5B Credit Line; Will Cover Employee RSU Taxes
Down)
According to Reuters late Thursday, social media giant Facebook (Nasdaq: FB)(NYSE: FB) is looking to expand its $2.5 billion line-of-credit (LOC) to cover employee stock option vesting taxes following the company's shares going public.
Facebook increased its borrowing capacity about 66 percent six-months ago to support its continued growth, Reuters noted.
Employees' restricted stock units, or RSUs, are set to vest about six months following Facebook's IPO. The company has said it would take care of any tax implications on the conversion. One lawyer quoted by Reuters noted the curtsey was an unusual move by an employer, which could draw ire should Facebook shares start to climb and the obligation becomes larger.
Issuing the initial $1.5 billion credit agreement in February 2011 were Facebook's lead underwriters: Morgan Stanley, J.P. Morgan, Goldman Sachs, Bank of America's Merrill Lynch and Barclays Capital. Setting up a LOC is good business for Internet companies like Facebook and Zynga (Nasdaq: ZNGA). Both are then able to fund back-up funds to balance their overall position. If terms on the LOC are good -- which they should be -- then the companies can also invest cash at better rates.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
Facebook increased its borrowing capacity about 66 percent six-months ago to support its continued growth, Reuters noted.
Employees' restricted stock units, or RSUs, are set to vest about six months following Facebook's IPO. The company has said it would take care of any tax implications on the conversion. One lawyer quoted by Reuters noted the curtsey was an unusual move by an employer, which could draw ire should Facebook shares start to climb and the obligation becomes larger.
Issuing the initial $1.5 billion credit agreement in February 2011 were Facebook's lead underwriters: Morgan Stanley, J.P. Morgan, Goldman Sachs, Bank of America's Merrill Lynch and Barclays Capital. Setting up a LOC is good business for Internet companies like Facebook and Zynga (Nasdaq: ZNGA). Both are then able to fund back-up funds to balance their overall position. If terms on the LOC are good -- which they should be -- then the companies can also invest cash at better rates.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
You May Also Be Interested In
- Yahoo!'s (YHOO) New Browser Seeks to Challenge Google (GOOG), Gain Apple (AAPL) Users; Glitches Abound
- Billionaire Trashes Facebook (FB) IPO, Then Buys a Slug of Stock
- Cree (CREE) Volatility Elevated as CFO Slide Continues
Create E-mail Alert Related Categories
Corporate News, Insiders' BlogRelated Entities
JPMorgan, Morgan Stanley, Merrill Lynch, Bank of America, Facebook, BarclaysSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
