Daily News: September 8, 2014

Bank of America Agents $2B Facility for Amazon

According to an 8-K filing, Amazon.com entered into a credit agreement with a lender group led by Bank of America, as administrative agent. The credit agreement provides the company with an unsecured revolving credit facility with a borrowing capacity of up to $2 billion. The term of the credit agreement is two years, but it may be extended for up to three additional one-year terms if approved by the lenders.
According to the filing, the initial interest rate applicable to outstanding balances under the credit agreement is the LIBOR rate plus 0.625%, with a commitment fee of 0.06% on the undrawn portion of the credit facility under Amazon’s current credit ratings. If the company’s credit ratings are downgraded these could increase to as much as LIBOR plus 1.00% and up to 0.10%, respectively.

The company said borrowings under the credit agreement may be used for working capital, capital expenditures, acquisitions, and other corporate purposes. The company currently has no borrowings outstanding under the credit agreement, but expects to borrow under the credit agreement from time-to-time in the ordinary course of business.