Cboe Global Markets, Inc. Enters Third Amended and Restated Credit Agreement
Key Points and Shareholder Impact
- Material Definitive Agreement: On July 24, 2026, Cboe Global Markets, Inc. (“the Company”) entered into a Third Amended and Restated Credit Agreement with Bank of America, N.A. as administrative agent and swing line lender, alongside a syndicate of major international banks and financial institutions.
- Extension and Modification of Revolving Credit Facility: The agreement extends the maturity date of the Company’s revolving credit facility and introduces significant amendments to the previous credit agreement.
- Financial Covenants: The updated agreement imposes financial covenants, including:
- Minimum consolidated interest coverage ratio of not less than 4.00 to 1.00.
- Maximum consolidated leverage ratio of not greater than 3.50 to 1.00, with provisions that allow step-ups to 4.25 to 1.00 and 4.00 to 1.00 for specific periods triggered by defined events, but require a return to 3.50 to 1.00 for at least two consecutive fiscal quarters before a second step-up can be exercised.
- Liens, Subsidiary Indebtedness, and Fundamental Changes: The agreement restricts the incurrence of liens, subsidiary indebtedness, and fundamental changes, while providing exceptions and permissions, particularly to support the Company’s clearing activities.
- Updates for Regulatory and Clearing Support: Amendments reflect changes in applicable law and grant further permissions in negative covenants to facilitate the Company’s clearing operations.
- Relationship Disclosure: Several lenders and syndication agents are trading permit holders, members, or clearing members on Company exchanges. These relationships are disclosed, as these parties may engage in trading and clearing activities on Cboe exchanges and may receive customary fees and commissions in the ordinary course of business.
- Pricing and Applicable Rates: The agreement establishes a tiered pricing structure for interest and fees based on the Company’s debt ratings (S&P/Moody’s):
- Higher ratings (A+/A1 or better) yield lower commitment fees (0.075%) and interest rates (Term SOFR Loans at 0.750%).
- Lower ratings (BBB+/Baa1) result in higher fees and rates (commitment fee 0.125%, Term SOFR Loans at 1.250%).
- If the Company has no debt rating, the highest pricing level applies (commitment fee 0.150%, Term SOFR Loans at 1.500%).
- Swing Line Facility: The agreement includes a \$25 million swing line sublimit, which is part of the aggregate commitments.
- Potentially Price-Sensitive Information:
- The enhanced covenants and extension of the credit facility may improve Cboe’s financial flexibility and strengthen its liquidity position.
- The relationship disclosures between lenders and Cboe’s exchanges, as well as the inclusion of clearing-related permissions, could impact market perceptions regarding conflict of interest, risk management, and operational integrity.
- The covenant step-up provisions allow Cboe to temporarily increase leverage during strategic transactions or periods of expansion, signaling the possibility of future M&A or large-scale investments.
- The pricing structure based on debt ratings means that future changes in Cboe’s credit ratings could have a material impact on its interest expense and financial performance.
- Exhibits: The full Third Amended and Restated Credit Agreement is attached as Exhibit 10.1 to the Form 8-K filing.
- Signatory: The Form 8-K was signed by Jill M. Griebenow, Executive Vice President and Chief Financial Officer.
What Shareholders Should Know
The Third Amended and Restated Credit Agreement provides Cboe with enhanced financial flexibility, potentially supporting future growth, acquisitions, or increased clearing activities. The ability to temporarily increase leverage, subject to financial tests, is a notable change that could be relevant if Cboe pursues significant investments or M&A activity. These changes, alongside the relationships between Cboe and its lenders, may affect investor sentiment and share price, especially if interpreted as facilitating strategic shifts or increasing risk exposure.
Investors should monitor Cboe’s credit ratings, as these will directly affect the cost of capital under the new agreement. Any future downgrades or upgrades could materially impact interest expenses and, consequently, the Company’s net earnings. Additionally, the disclosure of relationships with trading permit holders and clearing members may attract regulatory or market scrutiny if conflicts of interest or operational risks arise.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Investors should review official filings and consult with their financial advisors before making investment decisions. The information herein is based on the latest SEC filings and may be subject to change.
