Summary
Amazon.com, Inc. (AMZN) filed an 8-K on September 5, 2014, to disclose the entry into a new, unsecured revolving credit facility. This facility provides the company with a borrowing capacity of up to $2.0 billion and has an initial term of two years, extendable for up to three additional one-year periods. This new credit line offers Amazon flexibility for its operational needs, including working capital, capital expenditures, and potential acquisitions.
Key Highlights
- 1Amazon secured a new $2.0 billion unsecured revolving credit facility with a two-year initial term.
- 2The credit facility can be extended for up to three additional one-year terms, subject to lender approval.
- 3Borrowings can be used for working capital, capital expenditures, acquisitions, and other corporate purposes.
- 4The initial interest rate is LIBOR + 0.625%, with a commitment fee of 0.06% on undrawn amounts.
- 5Interest rates and commitment fees could increase if Amazon's credit ratings are downgraded.
- 6The agreement does not include financial covenants, providing operational flexibility.
- 7The company currently has no borrowings under this new facility but anticipates using it in the ordinary course of business.