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Cboe Global Markets, Inc. 8-K Report, Material Agreement (Jul 1, 2021)

Filed July 1, 2021For Securities:CBOE

Summary

Cboe Global Markets, Inc. (CBOE) has filed an 8-K report detailing significant amendments to its Term Loan Credit Agreement. The most impactful changes include extending the maturity date of the term loan by two years to December 15, 2023, and enabling an additional draw of $110 million. This additional borrowing was used to partially finance the company's previously announced acquisition of Chi-X Asia Pacific Holdings, Ltd. Further amendments refine the loan's terms, such as modifying the applicable margin to a fixed 65 basis points, incorporating LIBOR replacement provisions with a hardwired SOFR approach, and increasing the indebtedness limit for certain subsidiaries. Notably, Cboe can temporarily increase its maximum permitted consolidated leverage ratio to 4.00:1.00 following certain acquisitions, a provision that can be utilized once. These adjustments provide Cboe with increased financial flexibility to support its strategic growth initiatives.

Key Highlights

  • 1Maturity date of the term loan extended from December 15, 2021, to December 15, 2023.
  • 2An additional $110 million was borrowed on June 25, 2021, to partially fund the Chi-X Asia Pacific Holdings, Ltd. acquisition.
  • 3The applicable margin on loans is now a fixed 65 basis points, irrespective of the Company's debt rating.
  • 4LIBOR replacement provisions have been added, generally transitioning to a SOFR-based approach.
  • 5The limit on indebtedness for certain subsidiaries has been increased.
  • 6Cboe can temporarily increase its consolidated leverage ratio to 4.00:1.00 for four quarters following certain acquisitions, usable once.
  • 7Amendments align the term loan agreement with the company's revolving credit agreement.

Frequently Asked Questions

The amendment extends the maturity of the term loan by two years to December 2023 and allowed for an additional $110 million draw, which was used to help finance the acquisition of Chi-X Asia Pacific Holdings, Ltd. This provides Cboe with more time to repay the debt and greater financial capacity for strategic growth.

The applicable margin on the loans has been standardized to a fixed 65 basis points, regardless of Cboe's credit rating. This removes the variability previously tied to the company's debt rating, potentially simplifying interest expense management.

The amendment includes provisions for replacing LIBOR with a Secured Overnight Financing Rate (SOFR)-based benchmark. This is a significant change driven by the global transition away from LIBOR and ensures Cboe's loan agreement remains compliant with evolving financial market standards.

Yes, the amendment increases the capacity for certain subsidiaries to incur indebtedness and allows Cboe to temporarily increase its maximum consolidated leverage ratio to 4.00 to 1.00 (from 3.50 to 1.00) for four fiscal quarters following certain acquisitions, provided this increase is used only once. This offers flexibility for future growth opportunities or acquisitions.