Facebook Reducing Credit Line By Half Due To Tax Liability Decline

Posted Oct 7, 2012

Facebook is reducing their $3 billion credit line due to a decline in their tax liabilities according to a source with Bloomberg.  Facebook will be extending the term of their loan to three years from one year as well.  Facebook was able to secure a $3 billion 364-day bridge loan to help fund taxes for employees that exercised their restricted stock units.  They also set up a $5 billion five-year revolving line of credit before their IPO in May. Facebook’s tax liabilities are much lower than expected because the value of their stock dropped 45% since the IPO.  The credit financing was set up by banks like JPMorgan Chase & Co., Morgan Stanley, and Goldman Sachs Group.  [BusinessInsider]