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Cboe Global Markets, Inc. 8-K Report, Material Agreement (Mar 23, 2018)

Filed March 23, 2018For Securities:CBOE

Summary

Cboe Global Markets, Inc. (CBOE) has announced the entry into a new $300 million senior unsecured term loan facility, replacing an existing credit agreement. This strategic refinancing aims to optimize the company's debt structure, with the new loan maturing on December 15, 2021. While the commercial terms remain largely consistent, the new agreement reflects updated interest rates and maturity dates. The primary purpose of this new facility is to repay the outstanding $300 million from the previous term loan. This move is generally viewed positively by investors as it demonstrates proactive debt management and potentially secures more favorable borrowing conditions or extends maturity profiles. The covenants and terms are standard for this type of agreement, including financial covenants related to interest coverage and leverage ratios, ensuring continued financial discipline.

Key Highlights

  • 1Cboe entered into a new $300 million senior unsecured term loan facility on March 22, 2018.
  • 2The new facility was used to repay an existing $300 million term loan agreement.
  • 3The new loan matures on December 15, 2021, while the previous loan was set to mature on February 28, 2022.
  • 4Commercial terms are substantially unchanged, with adjustments to interest rates and maturity dates.
  • 5The agreement includes customary representations, warranties, and covenants, including financial covenants for interest coverage (min 4.00x) and leverage (max 3.50x).
  • 6Interest rates are variable, tied to LIBOR or Bank of America's prime rate, plus a margin based on Cboe's public debt ratings.
  • 7The previous term loan agreement was terminated upon full repayment of the outstanding balance.

Frequently Asked Questions

The primary purpose of the new $300 million Term Loan Agreement is to repay the outstanding $300 million indebtedness under Cboe's previous term loan agreement, dated December 15, 2016. This is a refinancing activity.

The new Term Loan Agreement matures on December 15, 2021. The existing Term Loan Agreement, which was terminated, was set to mature on February 28, 2022. So, the new loan has an earlier maturity date.

Cboe must meet a quarterly financial test requiring a minimum consolidated interest coverage ratio of not less than 4.00 to 1.00 and a maximum consolidated leverage ratio of not greater than 3.50 to 1.00. Failure to meet these could trigger default clauses.

Interest rates are variable and, at Cboe's option, can be based on either LIBOR (with a margin of 1.00% to 1.50%) or Bank of America's prime rate (with a margin of 0% to 0.50%). The specific margin is determined by Cboe's public debt ratings.