Did eBay draw down on the new credit facility or issue commercial paper at the time of the filing?

No, as of March 6, 2020, eBay had no borrowings outstanding under the new credit agreement. Furthermore, there were no borrowings outstanding under its commercial paper program at that time, indicating strong available liquidity.

What are the key terms and conditions of the new credit facility?

The credit facility is an unsecured, five-year revolving facility totaling $2.0 billion, with an option to increase commitments by up to $1.0 billion. It features interest rates based on LIBOR or an alternative benchmark rate plus a margin, or a base rate plus a margin, depending on the company's public debt ratings. The agreement includes covenants, such as a leverage ratio limitation, and customary events of default.

What are the details of the $1.0 billion notes offering?

eBay issued two series of senior unsecured notes: $500 million of 1.900% Notes due 2025 and $500 million of 2.700% Notes due 2030. These notes are redeemable by eBay and include a provision requiring an offer to repurchase at 101% of the principal amount plus accrued interest in the event of a Change of Control Triggering Event.

EBAY 8-K: Material Agreements

Q: What is the primary purpose of the new credit facility and the notes offering?

The new $2.0 billion revolving credit facility and the $1.0 billion notes offering are intended to provide eBay with financial flexibility for working capital, capital expenditures, acquisitions, and other general corporate purposes. These actions enhance the company's liquidity and capital structure management.

Summary

eBay Inc. (EBAY) filed an 8-K on March 11, 2020, detailing significant financing activities. The company entered into a new $2.0 billion, five-year unsecured revolving credit facility, which can be expanded by an additional $1.0 billion. This facility replaces their previous credit agreement and provides flexibility for working capital, capital expenditures, acquisitions, and other general corporate purposes. As of the filing date, no borrowings were outstanding under the new facility or the company's commercial paper program, indicating a strong liquidity position. In addition to the credit facility, eBay also announced the successful closing of a $1.0 billion senior unsecured notes offering. This offering comprised $500 million in 1.900% notes due 2025 and $500 million in 2.700% notes due 2030. The proceeds from this offering are expected to be used for general corporate purposes. These actions collectively demonstrate eBay's proactive approach to managing its capital structure and ensuring adequate financial resources for its operational and strategic needs.

Key Highlights

1Entered into a new $2.0 billion unsecured five-year revolving credit facility, with an option to increase by up to $1.0 billion.
2The new credit facility replaces a prior $2.0 billion unsecured revolving credit agreement dated November 9, 2015.
3Funds from the credit facility can be used for working capital, capital expenditures, acquisitions, and other general corporate purposes.
4As of March 6, 2020, no borrowings were outstanding under the new credit facility or the company's commercial paper program.
5Closed a $1.0 billion offering of senior unsecured notes, consisting of $500 million due 2025 (1.900% interest) and $500 million due 2030 (2.700% interest).
6The notes are redeemable at the company's option and require an offer to repurchase at 101% of principal if a Change of Control Triggering Event occurs.
7The credit agreement includes a covenant limiting the consolidated leverage ratio to 4.0:1.0, with a potential step-up to 4.5:1.0 following a qualified material acquisition.

EBAY INC 8-K Report, Material Agreement (Mar 11, 2020)

Summary

Key Highlights

Frequently Asked Questions