Compaq Computer Corp says it has secured a $4bn credit facility with a syndicate of 49 banks, led by Bank of America National Trust and Savings Association. The components of the new credit line are a five-year $3bn unsecured revolving credit facility and a one-year $1bn unsecured revolving credit facility. Chase Manhattan Bank, Citibank NA and NationsBank of Texas NA served as syndication agents. Compaq feels that the closing of the deal leaves it with the strongest balance sheet in the industry, according to a statement by chief financial officer Earl Mason. As the company already had $9.8bn in current assets on its last balance sheet – including $5.11bn in cash and short term investments – it couldn’t possibly need the money unless it is planning a major acquisition, perhaps that of a small country. A Compaq spokesperson would only say the facility was put in place for general corporate purposes and cited Compaq’s goal of being a $50bn company by 2000. In conjunction with the closing of the deal for the new facility, Compaq has retired its two existing secured revolving credit facilities, which totaled $1.5bn. The company says it has no borrowings outstanding under either of the new facilities or any others.
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