Summary
Intercontinental Exchange, Inc. (ICE) filed an 8-K on August 17, 2020, detailing an amendment to its existing revolving credit facility. This amendment, the Seventh Amendment, was entered into on August 14, 2020, to facilitate the pending acquisition of Ellie Mae Intermediate Holdings I, Inc. (Ellie Mae Acquisition). The key changes involve an increase in the maximum total leverage ratio covenant, temporarily allowing for higher leverage post-acquisition to accommodate the transaction's financing needs. Specifically, the leverage ratio allowance is increased from 3.50:1.00 to 4.50:1.00 for the four fiscal quarters following the acquisition's consummation, and then to 4.00:1.00 for the subsequent four quarters, before reverting to 3.50:1.00. Furthermore, the amendment allows for a one-time borrowing under the facility, not to exceed unutilized commitments, to finance a portion of the Ellie Mae Acquisition's cash consideration, refinance Ellie Mae's existing debt, and cover associated fees and expenses. This provides crucial flexibility for ICE to manage the financial aspects of a significant strategic acquisition.
Key Highlights
- 1ICE amended its senior unsecured revolving credit facility through the Seventh Amendment, dated August 14, 2020.
- 2The amendment is directly related to facilitating the financing of the pending acquisition of Ellie Mae.
- 3The maximum total leverage ratio covenant has been temporarily increased to accommodate post-acquisition debt levels.
- 4The leverage ratio allowance will be 4.50:1.00 for the first four quarters post-acquisition, then 4.00:1.00 for the subsequent four quarters.
- 5A one-time borrowing is permitted under the facility specifically to fund a portion of the Ellie Mae Acquisition and related costs.
- 6The existing credit facility had an aggregate principal amount of $3.4 billion prior to this amendment.
- 7The amendment modifies conditions precedent for a single borrowing event related to the acquisition.