Priceline gets $2 billion revolver at Libor plus 87.5 bps to 150 bps

By Toni Weeks

San Luis Obispo, Calif., June 24 – Priceline Group Inc. entered a credit agreement on June 19 that provides for a $2 billion revolving line of credit, according to an 8-K filing with the Securities and Exchange Commission.

The revolving facility provides for the issuance of up to $70 million of letters of credit as well as up to $50 million of same-day borrowings, or swingline loans, which are available in dollars, euros, pounds sterling or other currencies agreed to by the lenders. The credit agreement includes an accordion feature for an additional $500 million that may be added to the revolving line of credit or as one or more tranches of term loans.

Proceeds will be used for working capital and general corporate purposes, which may include acquisitions or share repurchases. As of the closing date, the company had no immediate plans to draw on the revolving line of credit but said it may do so in the future, the filing noted.

BofA Merrill Lynch, J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Citibank, NA, Deutsche Bank Securities, Inc., U.S. Bank NA and Wells Fargo Securities LLC are the joint bookrunners and joint lead arrangers. Bank of America, NA is administrative agent, and JPMorgan Chase Bank, NA is the syndication agent. BNP Paribas, Citibank, Deutsche Bank, U.S. Bank and Wells Fargo Bank are co-documentation agents.

Borrowings bear interest at Libor plus 87.5 basis points to 150 bps, with a Libor floor of 0%. There is also a commitment fee of 8.5 bps to 20 bps. Both are based on leverage and credit ratings.

The credit agreement requires Priceline to maintain a maximum leverage ratio of no more than 4 times and a minimum coverage ratio of at least 3 times.

The credit agreement matures on June 19, 2020, but it may be extended by up to one year with lender consent. Additionally, it may be terminated early without penalty and with “prompt” repayment of all amounts borrowed and payment of fees. The company may also reduce the unutilized portion of the commitment amount.

In connection with the new credit agreement, Priceline terminated its $1 billion credit agreement dated Oct. 28, 2011 with JPMorgan as administrative agent.

Priceline is a Norwalk, Conn.-based travel agency.

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