8-KMaterial AgreementsFinancial EventsOther Events+1

NASDAQ, INC. 8-K Report, Material Agreement (Jun 7, 2016)

Filed June 7, 2016For Securities:NDAQ

Summary

Nasdaq, Inc. (NDAQ) filed an 8-K on June 7, 2016, to report on the issuance and sale of $500 million in Senior Notes due 2026. These notes carry a 3.850% annual interest rate and mature on June 30, 2026. The primary purpose of this debt issuance is to finance the cash consideration for Nasdaq's acquisition of U.S. Exchange Holdings, Inc., the parent company of three electronic options exchanges (ISE, ISE Gemini, and ISE Mercury). Any remaining proceeds will be used for general corporate purposes, which may include other acquisitions or debt repayment. Furthermore, the filing indicates that Nasdaq has terminated its prior commitments for up to $1.1 billion in senior unsecured bridge loans that were arranged to also fund the ISE Transaction. This suggests that the Senior Notes issuance, along with existing cash and/or credit facilities, is sufficient to cover the acquisition financing needs, simplifying the capital structure for this significant transaction.

Key Highlights

  • 1Nasdaq issued $500 million in 3.850% Senior Notes due June 30, 2026.
  • 2Proceeds from the notes will primarily fund the acquisition of U.S. Exchange Holdings, Inc. (ISE Transaction).
  • 3The acquisition includes three electronic options exchanges: International Securities Exchange, ISE Gemini, and ISE Mercury.
  • 4Nasdaq terminated its commitments for up to $1.1 billion in bridge loans previously arranged for the ISE Transaction.
  • 5The company entered into a Supplemental Indenture with Wells Fargo Bank, N.A. as trustee for the Senior Notes.
  • 6An Underwriting Agreement was signed on June 2, 2016, with Mizuho Securities USA Inc., SEB Securities, Inc., and Wells Fargo Securities, LLC as underwriters.
  • 7The Senior Notes were issued under Nasdaq's Registration Statement on Form S-3.

Frequently Asked Questions

The primary purpose of the $500 million Senior Notes issuance is to provide funding for the cash consideration required for Nasdaq's acquisition of U.S. Exchange Holdings, Inc., which owns the International Securities Exchange (ISE) and two other related options exchanges.

Terminating the commitments for the $1.1 billion bridge loans indicates that Nasdaq has secured sufficient alternative financing (primarily through the Senior Notes issuance, cash on hand, and/or credit facilities) for the ISE Transaction. This simplifies Nasdaq's financing structure and potentially reduces future interest expenses associated with unused loan commitments.

The Senior Notes have an aggregate principal amount of $500 million, an annual interest rate of 3.850%, and mature on June 30, 2026. They were issued under a Fourth Supplemental Indenture to an existing indenture.

Yes, in addition to funding the ISE Transaction, Nasdaq states that the net proceeds may be used for general corporate purposes. This could include repaying other outstanding indebtedness or funding future acquisitions.