01—Abstract
Summary
Summary of the 8-K filed January 29, 2024. Cited figures are marked; the original filing is the authoritative source.
On January 26, 2024, MSCI Inc. entered into a Second Amended and Restated Credit Agreement with a syndicate of lenders and JPMorgan Chase Bank, N.A. as administrative agent.
The agreement makes $1,250.0 milliona of revolving loan commitments available, drawable until January 26, 2029, and amends and restates the Amended and Restated Credit Agreement dated June 9, 2022. The revolving loans were drawn at closing in an amount sufficient to prepay all term loans outstanding under the existing agreement. The obligations are general unsecured obligations of the Company and are not guaranteed by any subsidiary.
The facility bears interest at variable rates based on SOFR or the Base Rate plus an applicable margin tied to the company's senior unsecured long-term debt ratings. While the debt is rated BBB-/BBB- by S&P and Fitch, the margin is 0.50%b for Base Rate loans and 1.50% for SOFR loans. The agreement includes covenants restricting subsidiary indebtedness, liens, sale/leasebacks and mergers, and requires a maximum Consolidated Leverage Ratio of 4.25:1.00 (4.50:1.00 for four fiscal quarters following a material acquisition) and a minimum Consolidated Interest Coverage Ratio of 4.00:1.00.
Proceeds are for general corporate purposes, including working capital and acquisitions. In connection with the refinancing, the subsidiary guarantors were released from their guarantees under the existing credit agreement and under six senior notes indentures, in accordance with the terms of those indentures, effective January 26, 2024. The filing also notes that the lenders and their affiliates have engaged in and may in the future engage in other banking transactions with the company.
02—Key points
Key Highlights
- Entered into a Second Amended and Restated Credit Agreement dated January 26, 2024, with JPMorgan Chase Bank, N.A. as administrative agent
- Revolving loan commitments totaling $1,250.0 million, available until January 26, 2029
- Revolving loans were drawn at closing in an amount sufficient to prepay all outstanding term loans under the existing agreement
- Interest margin of 0.50% for Base Rate loans and 1.50% for SOFR loans while senior unsecured debt is rated BBB-/BBB- by S&P and Fitch
- Financial covenants require a maximum Consolidated Leverage Ratio of 4.25:1.00 (4.50:1.00 for four quarters after a material acquisition) and a minimum Consolidated Interest Coverage Ratio of 4.00:1.00
- Subsidiary guarantors were released from guarantees under the existing credit agreement and the senior notes indentures on January 26, 2024
- Obligations are general unsecured obligations of the company and are not guaranteed by any subsidiary
03—Questions
Frequently Asked Questions
How much capacity does the new credit facility provide?
The Credit Agreement makes available an aggregate of $1,250.0 million of revolving loan commitments, which may be drawn until January 26, 2029.
What will the borrowed funds be used for?
The proceeds of the revolving loans will be used for general corporate purposes, including working capital and acquisitions and other transactions permitted under the Credit Agreement. At closing, the loans were drawn in an amount sufficient to prepay all term loans outstanding under the Existing Credit Agreement.
What are the pricing terms of the revolving loans?
Loans bear interest at a variable rate based on SOFR or the Base Rate plus an applicable margin tied to the company's senior unsecured long-term debt ratings. While ratings are BBB-/BBB- from S&P and Fitch, the margin is 0.50% for Base Rate loans and 1.50% for SOFR loans.
What financial covenants must MSCI maintain?
The company must keep a maximum Consolidated Leverage Ratio of 4.25:1.00, measured quarterly on a rolling four-quarter basis (4.50:1.00 for four fiscal quarters following a material acquisition), and a minimum Consolidated Interest Coverage Ratio of 4.00:1.00, measured on the same basis.
Why were the subsidiary guarantees released?
Subsidiary guarantors were released from their guarantees under the Existing Credit Agreement and the Indentures upon termination of the Existing Credit Agreement on January 26, 2024, in accordance with the terms of the Indentures. The new Credit Agreement obligations are not guaranteed by any subsidiary.
04—Continue