Summary
CME Group Inc. (CME) filed an 8-K on October 16, 2006, detailing the renewal of its 364-day revolving credit facility. This facility, with a capacity of up to $800 million, is primarily intended to provide temporary liquidity for CME in specific operational scenarios, such as addressing defaults by clearing members or disruptions in money transfer systems affecting CME's operations. The credit line is secured by clearing firm security deposits and performance bonds held by CME.
Key Highlights
- 1CME Group Inc. renewed its 364-day revolving credit facility on October 13, 2006.
- 2The credit facility has a maximum capacity of $800 million.
- 3The facility is intended to provide temporary liquidity for specific operational needs.
- 4Key scenarios for utilizing the credit line include defaults by clearing members or issues with money transfer systems.
- 5The credit facility is collateralized by clearing firm security deposits and performance bonds held by CME.
- 6There is a provision allowing for an increase of the credit line to $1 billion, subject to bank approval.
Frequently Asked Questions
The renewed credit facility is designed to provide CME with temporary liquidity to manage specific operational circumstances. These include situations where CME needs to cover obligations arising from defaulting clearing members, using their security deposits and performance bonds, or when disruptions in money transfer systems impact CME's operations.
The credit facility is set at a maximum of $800 million. However, the agreement includes a provision that allows CME's Board of Directors to authorize an increase in the credit line to $1 billion, though this increase is contingent on the participating banks agreeing to comply with such a request.
The credit facility is collateralized by the clearing firm security deposits and performance bonds that are held by CME. This means these assets serve as security for the loans drawn under the facility.
The key parties involved are Chicago Mercantile Exchange Inc. (CME) as the borrower, various banks acting as lenders, Bank of Montreal as the administrative agent, The Bank of New York as the collateral agent, and BMO Capital Markets as the lead arranger.