8-KMaterial AgreementsSecurities & ListingRegulation FD+1

NASDAQ, INC. 8-K Report, Material Agreement (Feb 21, 2008)

Filed February 21, 2008For Securities:NDAQ

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.

Frequently Asked Questions

The primary purpose of the offering is to raise capital to fund Nasdaq's significant strategic initiatives, including its combination with OMX AB, investment in the Dubai International Financial Exchange, and proposed acquisitions of The Philadelphia Stock Exchange (PHLX) and the Boston Stock Exchange. The proceeds will also be used for debt repayment related to these acquisitions, working capital, and general corporate purposes.

The notes have an aggregate principal amount of $425 million (with an option for an additional $50 million), a coupon rate of 2.50% per year, and mature on August 15, 2013. They are convertible into Nasdaq common stock under specific conditions, with an initial conversion rate of 18.1386 shares per $1,000 principal amount, equivalent to an initial conversion price of approximately $55.13 per share.

The net proceeds will be used to fund the combination with OMX AB, an investment in the Dubai International Financial Exchange, and the proposed acquisitions of PHLX and the Boston Stock Exchange. A portion will also go towards repaying certain indebtedness of OMX and PHLX, covering ongoing working capital needs, and other general corporate purposes.

No, these notes are being issued to the initial purchasers (J.P. Morgan Securities Inc. and Banc of America Securities LLC) in a private placement, exempt from registration under Section 4(2) of the Securities Act. They will then be resold to "qualified institutional buyers" under Rule 144A. Therefore, they are not being offered directly to the general public at this stage.