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18 Oct 2008 09:13
EBay said on Friday it had borrowed $1-billion under its revolving credit facility, with funds going toward its pending acquisition of payments services Bill Me Later and other general corporate purposes.
The internet auctioneer still has approximately $840-million available under the facility.
In the midst of the corporate credit crunch, more companies are now turning to their revolving credit facilities, which are usually kept for emergencies, in order to conserve their own cash.
General Motors, First Data, AMR and Goodyear Tyre & Rubber are among a number of companies that have tapped their credit lines recently, as credit markets have been largely frozen. In some cases, there are fears that if they waited the capital may no longer be available.
EBay did not immediately return a message asking why it chose to dip into its credit facility, rather than raising new debt funding.
Last week, eBay announced it would pay about $924-million for US-based Bill Me Later, which offers consumers deferred payments and financing promotions.
The deal is expected to close sometime in the current quarter.
EBay is also buying two Danish classifieds businesses for about $390-million.
Earlier this week, the company cut its full-year earnings and revenue outlook, citing the weak consumer environment, the strengthening US dollar and the new acquisitions.
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