IHS Markit gets $3.1 billion three-year term loan, five-year revolver

By Susanna Moon

Chicago, June 26 – IHS Markit Ltd. obtained a $3.1 billion credit facility consisting of $1.1 billion of three-year term loans and $2 billion of five-year revolving credit commitments.

Interest on the loans ranges from Libor plus 100 basis points to 175 bps, based on the company’s corporate family rating.

IHS entered into the new multi-year unsecured credit agreement on Monday with BofA Merrill Lynch, JPMorgan Chase Bank, NA, Citigroup Global Markets, Inc., HSBC Securities (USA) Inc., RBC Capital Markets and Wells Fargo Securities, LLC as joint lead arrangers, according to an 8-K filing with the Securities and Exchange Commission.

BofA Merrill Lynch and JPMorgan Chase Bank, NA are the joint bookrunners.

Bank of America, NA is the administrative agent; JPMorgan Chase Bank, NA is the syndication agent; and Citibank, NA, London Branch, HSBC Bank plc, Royal Bank of Canada and Wells Fargo Bank, NA are the co-documentation agents.

At closing, the term loans were drawn in full and $1,331,000,000 of loans were drawn under the revolver with proceeds used to repay the company’s credit agreement dated July 12, 2016 with Bank of America NA as administrative agent.

The new revolver will be used for general corporate purposes.

The company may use up to $75 million of the new revolver for letters of credit.

The revolving credit commitments may be increased by up to $1 billion.

The multi-year term loans mature on July 12, 2021 and the commitments under the revolver terminate after a five-year term.

The unused fee ranges from 12.5 bps to 30 bps.

The financial covenants include a maximum leverage ratio of 3.75 times, increasing to 4 times for an elevated leverage period and a minimum interest coverage ratio of 3 times.

The credit agreement limits the ability of the company’s subsidiaries to incur or guarantee additional debt and the ability of the company and its subsidiaries to incur certain liens and to engage in fundamental change transactions.

In connection with the termination of the previous agreement, each guarantor of the company’s 5% senior notes due 2022, 4ľ% senior notes due 2025 and 4% senior notes due 2026 and of IHS Inc.’s 5% senior notes due 2022 was released from its guarantees under the terms of the note indentures.

Bridge agreement

On May 23 IHS Markit released details of its committed debt financing for the company’s planned $1,855,000,000 acquisition of Ipreo.

The company entered into a commitment letter with HSBC Securities (USA) Inc. and HSBC Bank USA NA on May 19 for the 364-day $1,855,000,000 term loan, the funding of which is contingent on some conditions, including completion of the merger.

Interest is Libor plus 100 basis points initially, with the margin slated to step up by 25 bps from the 180th to 269th day following the closing date and by an additional 50 bps from and after the 270th day after closing.

The commitment fee ranges from 12.5 bps to 30 bps depending on the company’s credit rating.

The 364-day agreement contains financial covenants that are consistent with those contained in the multi-year credit agreement, the filing Tuesday noted.

The company previously said it also plans to use cash on hand to purchase the New York-based provider of new issuance software solutions across the equity, fixed income, municipal and syndicated loan markets.

IHS Markit is a London-based financial information and services company.

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