Moody’s rates CBOE notes Baa1

Moody's Investors Service said it assigned a provisional rating of Baa1 to the proposed $1.65 billion senior unsecured debt issuance by CBOE Holdings, Inc.

The outlook is stable.

The rating assignment follows news that CBOE entered into a definitive agreement to acquire Bats Global Markets, Inc. for $3.2 billion.

The purchase price consists of $2.2 billion in CBOE stock and $1 billion in cash, the agency said.

CBOE intends to borrow the $1.65 billion to fund the cash portion and refinance Bats existing debt, Moody’s said.

CBOE has a strong track record of stable earnings and consistent cash flow generation, underpinned by a highly defensible business that includes a suite of proprietary products, the agency said.

The proposed acquisition of Bats is a transformative transaction for CBOE, which will increase the company’s revenue diversification and reduce reliance on transaction-based revenue, Moody’s said.

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