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Facebook adds 25 more underwriters for IPO
March 7, 2012 / 11:25 PM / in 6 years

Facebook adds 25 more underwriters for IPO

SAN FRANCISCO (Reuters) - Facebook Inc added 25 banks to help underwrite the company’s initial public offering, meaning most of Wall Street will have a role in the share sale, according to an amended IPO filing on Wednesday.

Facebook Chief Operating Officer Sheryl Sandberg delivers a keynote address at Facebook's "fMC" global event for marketers in New York City, February 29, 2012. REUTERS/Mike Segar

Facebook also said on Wednesday that it had secured two new credit facilities, one of which will help the company satisfy hefty tax withholding obligations and remittances related to employees’ stock units following its initial public offering.

Facebook, the world’s No. 1 Internet social network, with more than 845 million users, is preparing to raise $5 billion in a highly anticipated IPO that could value the company at up to $100 billion.

The new banks, including Citigroup, Credit Suisse and Deutsche Bank, increase the number of underwriters on the deal to 31, the filing said.

Among the two dozen new banks getting a piece of the Facebook IPO were several smaller firms, including Oppenheimer & Co, Pacific Crest Securities and Cowen and Co.

“The more banks you have, the more coverage you will have from those firms on the research side in the future. These banks will get paid well and there’s a lot of prestige associated with the Facebook IPO,” said Dan Niles, of the hedge fund AlphaOne Capital Partners.

Inclusion of smaller financial firms also could help ensure a wide distribution of Facebook’s stock, he said.

“Small firms will typically have some retail accounts, so it’s a way to spread shares out to those people who may not have access to Facebook stock,” said Niles.

Facebook disclosed a new $5 billion credit facility, replacing a previous $2.5 billion credit line. The company also entered into a bridge credit facility, allowing it to borrow up to $3 billion, the filing showed.

Reporting By Alistair Barr; Editing by Carol Bishopric and Steve Orlofsky

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