8-KMaterial AgreementsFinancial EventsOther Events+1

CME GROUP INC. 8-K Report, Material Agreement (Mar 9, 2015)

Filed March 9, 2015For Securities:CME

Summary

CME Group Inc. (CME) filed an 8-K on March 9, 2015, announcing the successful completion of a public offering of $750 million in senior unsecured 3.000% Notes due 2025. The proceeds from this issuance are primarily earmarked for the redemption of $612.5 million of outstanding 4.40% Senior Notes due 2018, demonstrating proactive debt management by refinancing higher-cost debt with a lower coupon. The company also entered into an Underwriting Agreement with Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, among others, to facilitate this offering. The new notes were issued under an existing indenture, as supplemented by a Seventh Supplemental Indenture. This move signals CME Group's strategy to optimize its capital structure and potentially reduce future interest expenses.

Key Highlights

  • 1Completion of a $750 million public offering of 3.000% Senior Notes due 2025.
  • 2Proceeds will be used to redeem $612.5 million of 4.40% Senior Notes due 2018.
  • 3This transaction represents a refinancing of higher-interest debt with lower-interest debt.
  • 4The offering was conducted under an existing shelf registration statement and a new Underwriting Agreement.
  • 5The new notes carry an interest rate of 3.000%, payable semi-annually.
  • 6The company may redeem the notes under certain conditions prior to maturity.
  • 7The filing also incorporates a forward-starting interest rate swap which effectively fixed the interest payable on the new notes at an estimated annual rate of 3.11%.

Frequently Asked Questions

This filing announces the completion of a significant debt offering, specifically $750 million in senior unsecured notes, and details the intended use of the proceeds to redeem existing, higher-interest debt.

CME Group is refinancing $612.5 million of 4.40% Senior Notes due 2018 with new 3.000% Notes due 2025. This is expected to reduce the company's annual interest expense.

The new notes have an aggregate principal amount of $750 million, bear a fixed interest rate of 3.000% per annum, and mature in 2025. Interest is payable semi-annually on March 15 and September 15.

Yes, CME Group has the option to redeem the notes prior to maturity under specific conditions, and a change of control event combined with a credit rating downgrade could trigger a repurchase obligation by the company at 101% of the principal amount.