Item 1.01. Entry into a Material Definitive Agreement
Supplemental Indenture
On
July 11, 2016, IHS Inc., a Delaware corporation (IHS), the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee, entered into the First Supplemental Indenture (the Supplemental Indenture)
implementing certain amendments to the Indenture (the Indenture) governing IHSs outstanding 5.000% Senior Notes due 2022 (the Existing IHS Notes) following IHSs receipt of requisite consents of the holders of the
Existing IHS Notes pursuant to the consent solicitation in respect of the Existing IHS Notes that commenced on June 27, 2016 (the Consent Solicitation). The Consent Solicitation is being made in connection with the offer to
exchange (the Exchange Offer) currently outstanding Existing IHS Notes issued by IHS, for new 5.000% Senior Notes due 2022 to be issued by IHS Markit Ltd. (the Combined Company) and cash. The Exchange Offer is being made in
connection with the Merger (as defined below). The Supplemental Indenture eliminates certain of the covenants, restrictive provisions and events of default contained in the Indenture. The Supplemental Indenture is effective upon
execution but will only become operative upon consummation of the Exchange Offer.
The foregoing description of the Supplemental Indenture
is not complete and is qualified by reference to the Supplemental Indenture, which is filed herewith as Exhibit 4.1 and is incorporated by reference in this current report.
Guarantee of IHS Markit Ltd. Credit Agreement
Concurrently with the consummation of the Merger (as defined below), the Combined Company and certain of its subsidiaries, entered into a new
Credit Agreement (the New Credit Agreement) with Bank of America, N.A., as administrative agent, and a syndicate of lenders party thereto, for credit facilities in an aggregate principal amount of $3,056.0 million, consisting of term
loans in an aggregate principal amount of $1,206.0 million (collectively, the New Term Loan) and revolving credit commitments in an aggregate principal amount of $1,850.0 million (collectively, the New Revolver). The New Term
Loan was borrowed in full in U.S. Dollars on July 12, 2016, and the New Revolver was drawn in an aggregate principal amount of $1,017.0 million on such date in connection with the Merger. The New Term Loan was incurred by Markit Group Holdings
Limited (MGHL), and, subject to certain conditions and limitations, the New Revolver may be drawn upon by MGHL, IHS Global, Inc., IHS Global SA and IHS Global Canada Limited, together with any additional subsidiaries of the Combined
Company designated as revolving borrowers under and pursuant to the terms of the New Credit Agreement.
The New Revolver, subject to
certain conditions and limitations, may be borrowed from time to time in U.S. dollars, Sterling, Euros, Canadian dollars, Swiss Francs, Japanese Yen, or other freely available currencies approved by the administrative agent. Up to $50.0 million of
the New Revolver is available for letters of credit. The borrowers may, subject to certain conditions and limitations, increase the outstanding principal amount of term loans and/or revolving credit commitments outstanding under the New Credit
Agreement in an aggregate principal amount not to exceed $500.0 million.
The obligations under the New Credit Agreement have been
guaranteed the Combined Company and certain of its U.S. and non-U.S. subsidiaries, including IHS.
The New Term Loans mature, and the
commitments under the New Revolver terminate, after a five year term, and are each unsecured. The New Term Loan may, at the option of MGHL as the borrower representative, bear interest based on an alternate base rate (equal to the highest of (a) the
federal funds rate plus 0.50%, (b) Bank of America, N.A.s prime rate, and (c) the Eurodollar rate plus 1.00%) or a Eurodollar rate (equal to the London Interbank Offered Rate (LIBOR) for the selected
interest period, with such modifications as set forth in the New Credit Agreement), plus, in either case, an applicable margin ranging from 0.00% to 0.75%, for alternate base rate loans and ranging from 1.00% to 1.75%, for Eurodollar rate loans,
with such applicable margin dependent upon, among other matters, the Leverage Ratio of the Combined Company and its subsidiaries, which is defined as the ratio of Consolidated Funded Indebtedness to rolling four quarter Consolidated EBITDA, each as
defined and further described in the New Credit Agreement. Loans in respect of the New Revolver denominated in currencies other than U.S. Dollars bear interest similarly, and with the same margins, except the base to which such margin is added may
differ from those described above, in the manner set forth in the New Credit Agreement, depending on the applicable currency. Prior to delivery of the first compliance certificate under the New Credit Agreement, after which the interest rate margins
may be modified on account of the Leverage Ratio as set forth above, the applicable margin for loans under the New Credit Agreement is 0.50% per annum for loans based on the alternative base rate (or corresponding rates for non-U.S. Dollar loans)
and 1.50% per annum for loans based on the Eurodollar rate (or corresponding rates for non-U.S. Dollar loans). Additionally, the New Credit Agreement contains a fee in respect of unused revolving credit commitments under the New Revolver. Such
commitment fee will initially be 0.25% per annum, and may be reduced in the future on account of the Leverage Ratio.
The New Credit
Agreement contains certain financial and other covenants, including a maximum Leverage Ratio and a minimum Interest Coverage Ratio, as defined in the New Credit Agreement. The New Credit Agreement requires the Combined Company and its consolidated
subsidiaries to maintain a maximum Leverage Ratio of 3.75:1.00 for the three consecutive trailing twelve month test periods following the Merger and 3.50:1.00 thereafter and a minimum Interest Coverage Ratio of 3.00:1.00, each as more fully
described in the New Credit Agreement. Such Leverage Ratio test is also subject to modification for certain material acquisitions as set forth in the New Credit Agreement.
The New Credit Agreement limits the Combined Companys and its subsidiaries ability to, among other things: (i) incur or guarantee
additional debt; (ii) make certain investments or acquisitions; (iii) incur certain liens; (iv) engage in certain types of fundamental change transactions; (v) make certain dispositions and asset sales; (vi) transact with our affiliates in certain
manners, (vii) make certain restricted payments (including certain dividends and distributions in respect of equity) and (viii) enter into certain burdensome or restrictive agreements. In addition, the New Credit Agreement contains certain customary
representations and warranties, affirmative covenants and events of default.
The lenders party to the New Credit Agreement or their
affiliates from time to time have provided in the past and may provide in the future investment banking, commercial lending and financial advisory services to IHS and its affiliates in the ordinary course of business.
Guarantee of MGHL Private Placement Note
Concurrently with the consummation of the Merger (as defined below), IHS and certain of its subsidiaries entered into subsidiary guarantee
deeds pursuant to which they guaranteed the obligations of MGHL under MGHLs outstanding $210,000,000 3.73% Series A Senior Notes due November 4, 2022 and $290,000,000 4.05% Series B Senior Notes due November 4, 2025 issued pursuant to a note
purchase agreement, dated as of November 4, 2015, among Markit Ltd., MGHL and the purchasers named therein.