01—Abstract
Summary
Summary of the 8-K filed January 12, 2017. Cited figures are marked; the original filing is the authoritative source.
Cboe Global Markets, Inc. (CBOE) filed an 8-K on January 12, 2017, primarily to report the entry into a material definitive agreement related to the issuance of $650 milliona in aggregate principal amount of 3.650% Senior Notes due 2027.
These notes are unsecured and will rank equally with other senior unsecured indebtedness of CBOE. The primary use of the net proceeds from this debt issuance is to fund, in part, the previously announced acquisition of Bats Global Markets, Inc. This acquisition, detailed in a prior 8-K filing from September 2016, involves a merger whereby Bats will become a wholly owned subsidiary of CBOE. The filing also details key terms of the Notes, including their maturity date, interest rate, and semi-annual payment schedule.
Importantly, the Notes are subject to a special mandatory redemption if the Bats acquisition is not completed by October 23, 2017, or if the merger agreement is terminated under certain conditions, in which case they would be redeemed at 101%b of their principal amount. Additionally, the Company may be required to repurchase the Notes upon a Change of Control Triggering Event.
02—Key points
Key Highlights
- Cboe Global Markets (CBOE) issued $650 million in 3.650% Senior Notes due January 12, 2027.
- Proceeds from the notes will partially fund CBOE's acquisition of Bats Global Markets, Inc.
- The Notes are unsecured and rank equally with CBOE's other senior unsecured indebtedness.
- The Notes mature on January 12, 2027, with interest paid semi-annually at 3.650% per annum.
- A special mandatory redemption provision exists if the Bats acquisition does not close by October 23, 2017, with redemption at 101% of principal.
- A Change of Control Triggering Event could require CBOE to repurchase the Notes at 101% of principal.
- The filing also includes details about the underwriting agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC.
03—Questions
Frequently Asked Questions
What is the primary purpose of the $650 million in Senior Notes issued by CBOE?
The primary purpose of the $650 million in 3.650% Senior Notes due 2027 is to help finance CBOE's previously announced acquisition of Bats Global Markets, Inc.
What are the key risks associated with these Senior Notes for investors?
Key risks include the unsecured nature of the notes, making them effectively junior to any secured debt. Additionally, the notes are subject to a special mandatory redemption at 101% of the principal if the Bats acquisition fails to close by October 23, 2017, or if the merger agreement is terminated under specific circumstances. A Change of Control Triggering Event could also lead to a mandatory repurchase at 101% of the principal.
How does the issuance of these notes relate to the Bats acquisition?
The debt issuance is directly linked to the financing of the Bats acquisition. The proceeds are intended to cover a portion of the acquisition cost. The terms of the notes also include provisions that trigger their redemption or repurchase if the acquisition does not proceed as planned.
What is the interest rate and maturity date of these notes?
The notes carry an interest rate of 3.650% per annum, payable semi-annually. The maturity date for these Senior Notes is January 12, 2027.
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