|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On March 6, 2020, eBay Inc. (the “Company”), as borrower, entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent; certain lenders named therein; Citibank, N.A. and Deutsche Bank Securities Inc., as Syndication Agents; Bank of America, N.A., HSBC Bank USA, National Association and Wells Fargo Bank, N.A., as Documentation Agents; and J.P. Morgan Chase Bank, N.A., BofA Securities, Inc., Citibank, N.A., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Bookrunners. The Credit Agreement provides for an unsecured $2.0 billion five-year revolving credit facility. The Company may also, subject to the agreement of the applicable lenders, increase the commitments under the revolving credit facility by up to $1.0 billion. Subject to specified conditions, the Company may designate one or more of its subsidiaries as additional borrowers under the Credit Agreement provided that the Company guarantees all borrowings and other obligations of any such subsidiaries under the Credit Agreement. As of March 6, 2020, no subsidiaries were designated as additional borrowers. Funds borrowed under the Credit Agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes of the Company and its subsidiaries. The Credit Agreement replaced the Company’s prior $2.0 billion unsecured revolving Credit Agreement, dated as of November 9, 2015 (as amended, the “Prior Credit Agreement”), among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, which was terminated effective March 6, 2020.
As of March 6, 2020, no borrowings were outstanding under the Credit Agreement. The Company is required to maintain available borrowing capacity under the Credit Agreement in order to repay borrowings under its commercial paper program in the event the Company is unable to repay those borrowings from other sources when they become due, in an aggregate amount of up to $1.5 billion. However, as of March 6, 2020, no borrowings were outstanding under its commercial paper program; therefore, $2.0 billion of borrowing capacity was available for other purposes permitted by the Credit Agreement.
Loans under the Credit Agreement will bear interest at either (i) a customary London interbank offered rate formula (“LIBOR”) or, upon a phase-out of LIBOR, an alternative benchmark rate as provided in the Credit Agreement plus a margin (based on the Company’s public debt ratings) ranging from 0.875 percent to 1.375 percent or (ii) a customary base rate formula, plus a margin (based on the Company’s public debt ratings) ranging from zero percent to 0.375 percent. Subject to certain conditions stated in the Credit Agreement, the Company and any subsidiaries designated as additional borrowers may borrow, prepay and reborrow amounts under the revolving credit facility at any time during the term of the Credit Agreement.
The Credit Agreement includes a covenant limiting the Company’s consolidated leverage ratio to not more than 4.0:1.0, subject to, upon the occurrence of a qualified material acquisition, if so elected by the Company, a step-up to 4.5:1.0 for the four fiscal quarters following such qualified material acquisition. The Credit Agreement includes customary events of default, with corresponding grace periods in certain circumstances, including payment defaults, cross-defaults and bankruptcy-related defaults. In addition, the Credit Agreement contains customary affirmative and negative covenants, including restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to customary exceptions. The Credit Agreement also contains customary representations and warranties.
The banks party to the Credit Agreement and/or their affiliates have from time to time provided, and/or may in the future provide, various financial advisory, commercial banking, investment banking and other services to the Company and its affiliates, for which they received or may receive customary compensation and expense reimbursement.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, which is included as Exhibit 10.1 hereto and is incorporated herein by reference.