Facebook secures $5 billion credit line, adds 25 underwriters

Facebook has doubled its credit facility to $5 billion, secured a $3 billion bridge loan, and added 25 more underwriters to its initial public offering (IPO) filing, for a grand total of 31 banks.
Written by Emil Protalinski, Contributor

As expected, Facebook today updated its filing for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC), in which the social networking giant effectively doubled its credit facility to $5 billion. A rumor from last week said Facebook was looking to increase its credit line but it didn't mention anything about a $3 billion bridge loan, which the company has also secured.

Both have the rate as their predecessors: LIBOR plus 1 percent. The company is looking for additional capital to pay taxes on the restricted stock units (RSUs) of its 3,200 employees when they vest six months after the company's IPO, which is rumored for May 2012.

Facebook also disclosed on Wednesday that it had added more underwriters, bringing the total to 31. When Facebook released all its IPO numbers last month, Morgan Stanley received the coveted lead left role. "Lead left" refers to where the top underwriter's name appears on the IPO prospectus. Also on the initial list of bookrunners on the deal were J.P. Morgan, Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital, and Allen & Company.

A separate rumor from last week suggested three more banks will be working on the company's initial public offering (IPO): Deutsche Bank, Credit Suisse Group, and Citigroup. Now we've learned the list is expanding with those three, with RBC Capital and Wells Fargo, and with many more. Of these 11 underwriters, 10 are participating in Facebook's credit facility. Here is the full list of 31 underwriters:

  1. Morgan Stanley & Co. LLC
  2. J.P. Morgan Securities LLC
  3. Goldman, Sachs & Co.
  4. Merrill Lynch, Pierce, Fenner & Smith Incorporated
  5. Barclays Capital Inc.
  6. Allen & Company LLC
  7. Citigroup Global Markets Inc.
  8. Credit Suisse Securities (USA) LLC
  9. Deutsche Bank Securities Inc.
  10. RBC Capital Markets, LLC
  11. Wells Fargo Securities, LLC
  12. Blaylock Robert Van LLC
  13. BMO Capital Markets Corp.
  14. C.L. King & Associates, Inc.
  15. Cabrera Capital Markets, LLC
  16. CastleOak Securities, L.P.
  17. Cowen and Company, LLC.
  18. Lazard Capital Markets LLC
  19. Lebenthal & Co., LLC
  20. Loop Capital Markets LLC
  21. M.R. Beal & Company
  22. Macquarie Capital (USA) Inc.
  23. Muriel Siebert & Co., Inc.
  24. Oppenheimer & Co. Inc.
  25. Pacific Crest Securities LLC
  26. Piper Jaffray & Co.
  27. Raymond James & Associates, Inc.
  28. Samuel A. Ramirez & Company, Inc.
  29. Stifel, Nicolaus & Company, Incorporated
  30. The Williams Capital Group, L.P.
  31. William Blair & Company, L.L.C.

The day the IPO was filed, I wrote "While it appears that Facebook has hired six bookrunners, the list could still grow (but it's unlikely to shrink)." I had no idea the number would more than quintuple.

In February 2011, Facebook set up a $1.5 billion credit agreement with five of the six leading underwriters of its $5 billion initial public offering (IPO). In September 2011, Facebook upped that number to $2.5 billion. Now it's at $5 billion plus a $3 billion bridge loan.

Here is the relevant document filed today with the SEC you may want to check out for more information: Amendment No. 2 to Form S-1 REGISTRATION STATEMENT.

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