Summary
CME Group Inc. (CME) announced on March 23, 2010, through a Form 8-K filing, the completion of a significant debt offering by its subsidiary, CME Group Index Services LLC. The subsidiary successfully issued $612.5 million in aggregate principal amount of 4.40% notes due in 2018, with CME Group Inc. providing an unconditional guarantee for these notes. This offering was conducted through a private placement under Rule 144A and Regulation S, indicating it was not a public offering to retail investors. These new notes are governed by an indenture that includes covenants restricting CME Group and its significant subsidiaries from incurring certain liens, engaging in specific sale and leaseback transactions, and limits consolidations or asset transfers. Importantly, the indenture also includes a provision for a repurchase offer at 101% of the principal amount if a change in control occurs at CME Group AND the notes are downgraded below investment grade by both Moody's and S&P within a specified timeframe. Investors should note that U.S. Bank National Association serves as the trustee for these notes and has had prior business relationships with CME Group.
Key Highlights
- 1CME Group subsidiary completed a $612.5 million offering of 4.40% notes due 2018.
- 2CME Group Inc. fully and unconditionally guarantees the notes.
- 3The offering was conducted as a private placement (Rule 144A and Regulation S).
- 4The indenture includes covenants limiting liens, sale and leaseback transactions, and asset disposals.
- 5A change of control event coupled with a dual credit rating downgrade (Moody's and S&P) triggers a mandatory repurchase offer at 101% of principal.
- 6U.S. Bank National Association acts as the trustee and has existing relationships with CME Group.