This excerpt taken from the NDAQ 10-K filed Mar 15, 2006.
In order to finance the INET transaction, Nasdaq entered into a credit agreement dated as of December 8, 2005, with JPMorgan Securities, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated acting as co lead arrangers and joint bookrunners. The credit agreement provides for up to $825.0 million of senior secured financing. The $825.0 million available under the credit agreement includes (1) a five-year $75.0 million revolving credit facility, with a letter of credit subfacility and swingline loan subfacility, and (2) a six-year $750.0 million senior term loan facility. The interest rate on loans made under the revolving credit facility varies depending upon Nasdaqs leverage ratio and LIBOR, and the interest rate on Nasdaqs senior term facility is LIBOR plus 150 basis points. Accordingly, the interest rate will vary over time. On December 8, 2005, Nasdaq drew the full $750.0 million senior term debt. As of December 31, 2005, Nasdaq had not drawn any funds under the revolving credit facility. As of December 31, 2005, borrowings under the $750.0 million senior term debt bore interest at an average rate of 6.14% per annum. Nasdaq pays customary fees and expenses related to the credit facility, including a commitment fee of 0.50% per annum on the average daily unused portion of the revolving credit facility. Interest expensed and paid on the $750.0 million senior term debt totaled approximately $3.1 million and $0.8 million, respectively, for the year ended December 31, 2005.
Nasdaqs obligations under the credit facility are secured by a security interest in and liens upon substantially all of the assets of Nasdaq and its subsidiaries. All Nasdaqs domestic subsidiaries are guarantors of Nasdaqs obligations under the credit agreement (excluding the regulated broker-dealer subsidiaries and the insurance-related subsidiaries).
The credit agreement contains customary covenants, which, among other things, restricts Nasdaqs ability to take on new debt, sell assets, issue stock, make loans, and declare dividends. The credit agreement also requires Nasdaq to maintain a minimum interest expense coverage ratio and a maximum leverage ratio. The credit agreement also contains customary events of default, as well as cross-defaults with the convertible notes as discussed below and described fully in the credit agreement. See Contractual Obligations and Contingent Commitments in Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations for further discussion.
Upon consummation of the INET transaction, and in conjunction with the issuance of the $750.0 million senior term debt, Nasdaq was obligated to repay in full the $25.0 million senior notes. On November 30, 2005, Nasdaq repaid in full the $25.0 million senior notes and paid and recorded a loss on the early extinguishment of the $25.0 million senior notes of approximately $1.1 million and used proceeds from the sale of held-to-maturity investments and cash on hand to finance the redemption. The $25.0 million senior notes were issued in May 1997
The Nasdaq Stock Market, Inc.
Notes to Consolidated Financial Statements(Continued)
and were to mature in 2012. These notes required monthly interest payments through May 2007 at an annual rate of 7.41%. After May 2007, Nasdaq would have incurred interest equal to the lenders cost of funds rate, as defined in the agreement, plus 0.5%. Interest expensed and paid on the $25.0 million senior notes totaled approximately $1.7 million and $1.9 million, respectively, for the year ended December 31, 2005 and totaled approximately $1.9 million for each of the year ended December 31, 2004 and 2003.
In conjunction with the financing of the INET transaction, which includes the credit facility, issuance of the $205.0 million convertible notes and restructuring of the $240.0 million convertible notes, Nasdaq incurred debt issuance costs of $15.0 million. These costs were capitalized and are included in other assets in the Consolidated Balance Sheets and are being amortized over the life of each debt obligation. Beginning December 8, 2005, Nasdaq began amortizing these costs and recorded $0.2 million as additional interest expense in the Consolidated Statements of Income.
This excerpt taken from the NDAQ 10-K filed Mar 14, 2005.
11. Senior Notes
On September 30, 2003, Nasdaq redeemed its $150.0 million outstanding principal amount of the senior notes. Under the terms of the senior notes, Nasdaq paid the holders of the senior notes $150.0 million in outstanding principal amount, accrued interest of $1.2 million and an aggregate make-whole payment of approximately $12.6 million (representing the net present value of future payments). Nasdaq recorded a $13.2 million pre-tax charge in the third quarter of 2003 related to the redemption of the senior notes. This charge included the make-whole payment and capitalized costs related to the issuance of the senior notes. Nasdaq used funds from available cash and investments to finance the redemption. See Long-term Debt, of Note 3, Significant Transactions, for further discussion. Interest expensed and paid under the senior notes totaled approximately $6.5 million and $5.6 million for the years ended December 31, 2003 and 2002, respectively.
In May 1997, Nasdaq entered into a $25.0 million note payable with a financial institution (the Lender). Principal payments are scheduled to begin in 2007 and continue in equal monthly installments until maturity in 2012. The note requires monthly interest payments through May 2007 at an annual rate of 7.41%. After May 2007, Nasdaq will incur interest equal to the Lenders cost of funds rate, as defined in the agreement, plus 0.5%. Interest expensed and paid under the agreement totaled approximately $1.9 million for each of the years ended December 31, 2004, 2003 and 2002.