Twitter Inc. is parlaying its surging popularity and the intense competition among banks for Internet deals to squeeze unusually favorable terms from the firms that will take it public.
The fees banks are set to collect for selling the shares — at 3.25 percent of the money raised, said people familiar with the deal — would be the lowest percentage paid on a U.S.-listed IPO in more than a year, according to Ipreo, a capital-markets data and advisory firm.
What is more, the microblogging service is nearing completion of a $1 billion credit line from its bankers that it can use to help finance its growth, the people said. The credit is arriving even as Twitter is seen by some analysts as a riskier credit bet than some other Internet companies that went public in recent years.
The arrangement shows the power that high-profile Silicon Valley companies can command on Wall Street. In what has become a standard playbook for these companies, Twitter asked for credit from banks seeking to handle its IPO to lend it money, the people said. That setup enables companies to maximize the money they extract out of Wall Street at the time of their IPOs.
When banks work on hot IPOs, they get bragging rights and position themselves for plum roles in any future transactions the company does.
