AOL Time Warner, battling investor unease over debt levels and other issues, has arranged to replace a pair of soon-to-elapse corporate financing agreements with revolving credit facilities providing $10 billion.
The New York-based media giant said Monday one of its new facilities is a five-year financing providing $6 billion, and the other is a 364-day funding for $4 billion. The financing replaces a $5 billion facility set to elapse in September and a $7.5 billion facility maturing in November.
Though the new facilities rep a total $2.5 billion reduction in conglom’s credit line, AOL TW spokeswoman Tricia Primrose said that was a conscious decision by execs.
“The banks were saying they would make available up to $12 billion,” Primrose said. “We opted to take only $10 billion, because that’s all we needed.”
Five banking agents led a 27-lender syndication — ABN Amro, Bank of America, BNP Paribas, Citibank and JP Morgan Chase.
“We appreciate the continued support and confidence in our company’s financial stability and prospects that the banks and investment banks are showing by providing these credit commitments,” AOL TW chief financial officer Wayne Pace said.
“We are committed to preserving the integrity of our balance sheet, including our strong, investment-grade credit ratings, and delivering clear and complete information to our investors,” Pace said. “These new bank credit facilities provide us with sufficient resources and flexibility to both operate our businesses and take advantage of strategic opportunities over the next few years.”
Execs also noted the financing is not dependent on conglom’s maintaining any particular bond ratings.
The new facilities were announced after the close of trading, as AOL TW shares fell 23¢, or 1.6%, to $14 after a broadly downbeat market sesh. Stock, which has been trading near historic lows of late, has lost 56% since Jan. 2.