Summary
CME Group Inc. (CME) has filed an 8-K report detailing a significant financing and joint venture arrangement. The company's subsidiary, CME Group Index Services LLC, is issuing $612.5 million in 4.40% senior notes due 2018. These notes are guaranteed by the parent company, CME Group Inc. The proceeds from this debt offering are primarily intended to fund a special distribution to Dow Jones & Company, amounting to approximately $607.5 million. This transaction is intrinsically linked to the formation of a new joint venture. This joint venture will be 90% owned by CME Group and 10% by Dow Jones & Company. The venture's assets will include the Dow Jones Indexes business and the CBOT market data services business. The concurrent closing of the note offering and the joint venture formation indicate a strategic move by CME Group to leverage its index and data services while undertaking a substantial debt financing.
Key Highlights
- 1CME Group Inc. subsidiary priced an offering of $612.5 million in 4.40% senior notes due 2018.
- 2The senior notes are fully and unconditionally guaranteed by CME Group Inc.
- 3Proceeds will be used to fund a special distribution of approximately $607.5 million to Dow Jones & Company.
- 4The transaction is tied to the formation of a new joint venture that will own Dow Jones Indexes and CBOT market data services.
- 5CME Group will own 90% of the joint venture, with Dow Jones & Company owning 10%.
- 6The offering is being conducted through a private placement to qualified institutional buyers and non-U.S. persons.
- 7The closing of the note offering and the joint venture are expected to occur concurrently.