8-KMaterial AgreementsExhibits & Filings

CME GROUP INC. 8-K Report, Material Agreement (Oct 15, 2008)

Filed October 15, 2008For Securities:CME

Summary

CME Group Inc. (CME) has filed an 8-K report detailing the renewal of its 364-day revolving credit facility by its subsidiary, Chicago Mercantile Exchange Inc. This facility, with an initial limit of $600 million, is designed to provide temporary liquidity for CME in specific scenarios, such as covering obligations of defaulting 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. An important provision within this renewal allows CME's Board of Directors the authority to increase the credit facility's limit up to $1 billion. However, this expansion is subject to the discretion and agreement of the participating banks, meaning it is not a guaranteed increase. Investors should note that this facility primarily serves as a backstop for liquidity needs under defined circumstances, rather than representing a general-purpose funding source. The renewal ensures continued access to financial flexibility for CME during potentially volatile market conditions.

Key Highlights

  • 1CME Group Inc. renewed its 364-day revolving credit facility for its subsidiary, Chicago Mercantile Exchange Inc., on October 10, 2008.
  • 2The initial credit facility has a maximum borrowing capacity of $600 million.
  • 3The purpose of the credit facility is to provide temporary liquidity for specific operational needs, including covering defaults by clearing members or disruptions in money transfer systems.
  • 4The credit facility is collateralized by clearing firm security deposits and performance bonds held by CME.
  • 5CME's Board of Directors has the option to authorize an increase in the credit line to $1 billion.
  • 6Any increase in the credit line beyond $600 million is contingent upon the agreement of the participating banks.
  • 7The filing is categorized under Item 1.01 (Entry into a Material Definitive Agreement) and Item 9.01 (Financial Statements and Exhibits).

Frequently Asked Questions

The primary purpose of the renewed credit facility is to provide temporary liquidity to Chicago Mercantile Exchange Inc. (CME) in specific 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 initial maximum borrowing capacity under the renewed credit facility is $600 million. However, CME's Board of Directors has the authority to approve an increase of this line of credit up to $1 billion, subject to the participating banks' agreement.

The credit facility is collateralized by the clearing firm security deposits and performance bonds that are held by CME.

Not necessarily. While the Board of Directors can authorize an increase to $1 billion, the actual increase is dependent on the willingness and agreement of the participating banks to extend the credit line. It represents an option for additional liquidity, not a guaranteed funding source at the higher amount.