Summary
On February 20, 2008, The Nasdaq Stock Market, Inc. (Nasdaq) entered into a purchase agreement to sell $425 million in aggregate principal amount of 2.50% convertible senior notes due 2013. This offering, which includes an option for an additional $50 million to cover over-allotments, is being conducted through a private placement to qualified institutional buyers under Rule 144A, with J.P. Morgan Securities Inc. and Banc of America Securities LLC acting as initial purchasers. The proceeds from this note issuance are earmarked for significant strategic initiatives, including funding the combination with OMX AB, investing in the Dubai International Financial Exchange, and pursuing the proposed acquisitions of The Philadelphia Stock Exchange (PHLX) and the Boston Stock Exchange. Additionally, the funds will be used to repay debt incurred by OMX and PHLX, cover ongoing working capital needs, and for general corporate purposes. This move signifies Nasdaq's aggressive expansion strategy in the financial markets.
Key Highlights
- 1Nasdaq is issuing $425 million of 2.50% convertible senior notes due 2013, with an option for an additional $50 million.
- 2The offering is a private placement to qualified institutional buyers under Rule 144A.
- 3Proceeds will fund the combination with OMX AB, investment in Dubai International Financial Exchange, and acquisitions of PHLX and Boston Stock Exchange.
- 4The Notes bear an annual interest rate of 2.50%, payable semi-annually.
- 5Holders can convert the Notes under specific conditions related to Nasdaq's stock price, trading price of the Notes, or upon certain corporate transactions.
- 6The initial conversion rate is 18.1386 shares of Nasdaq common stock per $1,000 principal amount, implying an initial conversion price of approximately $55.13 per share.
- 7Nasdaq expects to use net proceeds, available cash, and borrowings under a new credit facility for these strategic moves.