MORNINGSTAR, INC. : Entering into a Material Definitive Agreement, Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Material Modification of Rights of Securityholders (Form 8-K)


Section 1.01 Entering into a Material Definitive Agreement.

On May 6, 2022, Morningstar, Inc. (“Morningstar” or the “Company”), certain foreign subsidiaries of the Company as named borrowers (the “Nominated Borrowers”) and certain subsidiaries of the Company as guarantors have entered into a new credit agreement (the ” Credit Agreement”) with Bank of America, North America., as Administrative Agent, L/C Issuer and Swingline Lender (the “Agent”). The credit agreement provides Morningstar with a five-year, multi-currency credit facility with borrowing capacity of up to $1.1 billionincluding an $450.0 million
revolving credit facility (the “Revolving Credit Facility”) and a deferred term credit facility of up to $650.0 million (the “Term Facility” and, together with the Revolving Credit Facility, the “Facility”). The credit agreement also provides for the issuance of a maximum of $50.0 million letters of credit and a
$100.0 million sub-limit for a revolving line facility under the revolving credit facility. From May 6, 2022the aggregate principal balance outstanding under the revolving credit facility was $180.0 million, which represents a rollover of amounts outstanding under the Company’s former credit agreement. Proceeds from future borrowings under the revolving credit facility may be used for working capital, capital expenditures and other legal corporate purposes. Proceeds from any drawdown under the Term Facility will be used to fund Morningstar’s pending acquisition (the “Acquisition”) of the assets associated with S&P Global Inc.’s leveraged commentary and data business. ., a New York
Company and its related leveraged loan index portfolio, to pay any purchase price adjustment in connection with the Acquisition and to pay the fees and expenses incurred in connection with the Facility. The acquisition is subject to certain regulatory approvals and other customary closing conditions. For further information regarding the acquisition, please see our current report on Form 8-K which has been filed with the SECOND on April 4, 2022.

The interest rate applicable to loans under the Credit Agreement will be based on the SOFR forward rate, SONIA rate, EURIBOR, CDOR or BBSY depending on the currency of the loan and will include an applicable margin for these loans ( between 1.00% and 1.375%, based on Morningstar’s consolidated leverage ratio) and other applicable adjustments, as further described in the Credit Agreement. There is a floor of zero for all interest rates.

The Company is subject to various positive and negative covenants and reporting obligations under the facility. These include, among others, that the Company must have a consolidated leverage ratio at the end of any fiscal quarter of the Company that does not exceed 3.50 to 1.00; provided that, solely with respect to the four fiscal quarters following any Material Acquisition (as defined in the Credit Agreement), the Consolidated Leverage Ratio determined at the end of such four fiscal quarters is not greater than 3, 75 for 1.00. The credit agreement provides that the company must have a consolidated interest coverage ratio at the end of any fiscal quarter of at least 3.00 to 1.00.

The obligations of the Company and the Designated Borrowers under the Credit Agreement are unconditionally guaranteed by the subsidiaries of the Company,
Morningstar Investment Management LLC, Morningstar Research Services LLC and
Morningstar Ratings Holding Corp., and will in the future be guaranteed by any other national subsidiary of the Company (with certain exceptions) which, as a result of an investment, disposal of assets by the borrower or any subsidiary or acquisition, contributes to 10% or more of the Company’s consolidated revenue in any fiscal year. Certain foreign subsidiaries of the Company are Designated Borrowers (as defined in the Credit Agreement) and the Company may also add other foreign subsidiary borrowers under the Credit Agreement.

The above summary of the Agreement and the contemplated transactions does not purport to be complete and is subject to and qualified in its entirety by the full text of the Agreement. The agreement is not filed herewith, but will be filed as an attachment to Morningstar’s quarterly report on Form 10-Q for the quarterly period ending June 30, 2022 or a previous current report on Form 8-K.

 Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
           Off-Balance Sheet Arrangement.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Section 3.03. Material change in the rights of securityholders.

The Credit Agreement contains a restrictive covenant which, among other things, restricts the ability of the Company, its subsidiaries and certain affiliates to, among other things, pay dividends on its share capital. The disclosure set forth above at 1.01 is incorporated by reference into this 3.03.


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