Friday, October 17, 2008

eBay Borrows $1 Billion from Credit Facility!

According to a recent filing with the SEC:
On October 16, 2008, eBay Inc. (the "Company") drew down an aggregate amount of $1.0 billion under its revolving credit facility (the "Facility") pursuant to the Credit Agreement (as amended, the "Credit Agreement") with Bank of America, N.A., as Administrative Agent (the "Agent"); certain lenders named therein; JP Morgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as Syndication Agents; and Banc of America Securities LLC, J.P. Morgan Securities Inc. and Wells Fargo Bank, N.A., as Joint Lead Arrangers and Joint Book Managers. This borrowing under the Facility currently bears interest at a rate equal to one-month LIBOR plus a margin of 0.20% (4.67% as of October 16, 2008). We expect that the funds will be used for general corporate purposes, including financing the acquisition of Bill Me Later, Inc. and its associated receivables. Following this borrowing, the remaining availability under the Facility is approximately $840 million (which also reflects a $160 million reduction in available borrowing resulting from the bankruptcy filing of Lehman Brothers Holdings Inc., the parent corporation of Lehman Brothers Commercial Bank (which had a $160 million lending commitment) [Bold is mine]



Just my 15%

6 comments:

Anonymous said...

There's 180 million left Randy. Grow that beard out, pose as Griff, and make off with a few hunnert thou!

I take back the Griff part. Why lower yourself!!!

What does it all mean for ebay's supposed, Legendary Cash Position?

Probably all spent up on their own stock repurchases!

Anonymous said...

Could someone explain what this means in English?

Randy Smythe said...

Anonymous, thanks for the laugh.

They have a $2 Billion credit facility (line for us humans) of which they are borrowing $1 billion for corporate stuff and the purchase of Bill Me Later.

Hope that helps.

BTW, they have never borrowed before.

ms.pat said...

It all seems to go with JD's idea of beating out Amazon. Guess he intends to go almost totally big-box so they can take care of the "nonsense" such as customer service, refunds, etc. Ebay will do what it does best...sell advertising and rake in money. No need for the "noise"...er...sellers. Hence, no need for frivolities such as discussion boards, groups, etc. I'm afraid the days are numbered now....unless somebody offers a job to Donahoe that he can't possibly refuse. LOL

Walter Tornopilsky said...

Lots of companies are tapping their lines right now. Credit markets are tight, and rather than put themselves at risk of coming up short of funds in a tight credit market, prudent CFOs are tapping lines and sitting on a little more cash than they might normally.

Bill Me Later puts eBay in a new position with regard to financing and cashflow and they're probably just getting out ahead of their new cash needs.

I don't think this is anything to get excited about. This is just housekeeping stuff.

Randy Smythe said...

Walter,

You are correct, they are just doing some standard stuff and this is smart with the Bill Me later deal, but it is still something they have never done before, so it is news.