Twitter has just announced via an S-1 amendment that “the Company entered into a revolving credit agreement with certain lenders which provides for a $1.0 billion revolving unsecured credit facility maturing on October 22, 2018.” Twitter also listed out financials for its acquisition MoPub, including that it brought in $6.51 million in revenue in the six months ending June 30th 2013.
The credit line could help Twitter if it suddenly wanted to make an acquisition, expand, handle changing month to month expenditures, or pay for sudden unforeseen costs. Twitter says its underwriters or their affiliates are the lenders of the credit, which include Goldman Sachs, Morgan Stanley, J.P. Morgan, Bank Of America Merrill Lynch, Deutsche Bank Securities, Allen & Company LLC, and CODE Advisors. Here’s how the credit line’s interest and fees work:
“Loans under the credit facility bear interest, at our option, at (i) a base rate based on the highest of the prime rate, the federal funds rate plus 0.50% and an adjusted LIBOR rate for a one-month interest period plus 1.00%, in each case plus a margin ranging from 0.00% to 0.75% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.00% to 1.75%. This margin is determined based on our total leverage ratio for the preceding four fiscal quarter period, but will be at the highest level at least until we consummate this offering.”
Twitter will have to pay standard upfront and unused commitment fees for a credit facility this large. It hasn’t drawn on any of its $1 billion in credit yet, but it’s a big well to draw from considering Twitter’s IPO itself is expected to raise about $1 billion. For reference, Facebook took a $8 billion credit line for its IPO where it raised $16 billion. Note that I cover Twitter competitor Facebook frequently but have no financial conflicts, and criticism of both comes from a desire to see my fellow users of theirs have the best experience.
As for MoPub, the S-1 amendment also lists out the first hard financial details of the private adtech startup Twitter bought for about $350 million. MoPub took in $6.51 million in net revenue (Correction: not earnings as we briefly wrote here and in the headline) in the first half of 2013 with a net loss of $2.82 million, and had revenues of $2.69 million in all of 2012 with a net loss of $8.14 million. The acquisition is expected to close in November. You can see the charts below.
Twitter also detailed how it will handle the stock plan for its January 2013 acquisition Crashlytics.
The new info comes as Twitter prepares for a much anticipated IPO on the NYSE under the symbol TWTR. The company’s previous S-1 filings showed that it now has 230 million active users and earned $168.6 million in revenue in Q3 2013. Twitter’s aggregate loss for 2013 as of the end of Q3 was $133.8 million. Twitter sees 70% of its ad revenue coming from mobile. That means its financial future as the world shifts to the small screen is somewhat proven.