01—Abstract
Summary
Summary of the 8-K filed December 21, 2020. Cited figures are marked; the original filing is the authoritative source.
On December 21, 2020, Nasdaq, Inc. announced the successful completion of a substantial public offering of senior notes totaling $1.90 billiona.
This offering was divided into three tranches: $600 millionb in 0.445% notes due 2022, $650 million in 1.650% notes due 2031, and $650 million in 2.500% notes due 2040. The net proceeds from this offering are earmarked for financing the cash consideration for Nasdaq's pending acquisition of Verafin Holdings Inc., repaying Verafin's outstanding indebtedness, and covering related expenses and general corporate purposes. In addition to the notes offering, Nasdaq also entered into a new $1.25 billion senior unsecured five-year revolving credit facility, replacing a previous agreement.
This new facility provides flexible borrowing options in various currencies and includes a covenant related to the company's Leverage Ratio. This move signifies Nasdaq's proactive approach to managing its capital structure and financing its strategic growth initiatives, particularly the significant acquisition of Verafin.
02—Key points
Key Highlights
- Nasdaq successfully raised $1.90 billion through a public offering of senior notes across three maturity tranches (2022, 2031, 2040).
- Proceeds are intended to fund the acquisition of Verafin Holdings Inc., repay Verafin's debt, and cover related expenses.
- A new $1.25 billion five-year revolving credit facility has been established with Bank of America, N.A.
- The new credit facility replaces a prior agreement and offers borrowing in multiple currencies.
- A financial covenant in the new credit agreement mandates a Leverage Ratio not to exceed 3.50:1.00, with a permissible step-up to 4.50:1.00 post-Verafin acquisition.
- The terms of the senior notes include provisions for a special mandatory redemption if the Verafin acquisition is not completed by a specified date.
- The company also terminated its previous credit agreement upon entering the new one.
03—Questions
Frequently Asked Questions
What is the primary purpose of the $1.90 billion senior notes offering?
The primary purpose of the senior notes offering is to finance the cash consideration for Nasdaq's pending acquisition of Verafin Holdings Inc., repay certain outstanding indebtedness of Verafin and its subsidiaries, and cover related expenses, with any remaining proceeds for general corporate purposes.
What is the new revolving credit facility and how does it differ from the previous one?
Nasdaq entered into a new $1.25 billion senior unsecured five-year revolving credit facility. This facility replaces a previous agreement and provides greater flexibility, allowing for borrowings in various currencies and including an option to increase commitments by up to $625 million, subject to lender consent. It also introduces a Leverage Ratio covenant.
What happens to the senior notes if the Verafin acquisition does not go through?
If the Verafin acquisition is not consummated by February 18, 2022, or if Nasdaq terminates the transaction agreement or decides not to pursue the acquisition, the company will be required to redeem all outstanding Senior Notes at 101% of their aggregate principal amount, plus accrued interest.
What are the key financial covenants associated with the new revolving credit facility?
The new revolving credit agreement includes a financial covenant requiring that Nasdaq's Leverage Ratio not exceed 3.50 to 1.00 as of the last day of any four consecutive fiscal quarters. This ratio has a permissible step-up to 4.50 to 1.00 upon the consummation of the Verafin acquisition.
04—Continue