Item 1.01. Entry into a Material Definitive Agreement.
On
The Company expects to use the net proceeds from the offering to reduce outstanding indebtedness under the Company's credit agreement and for general corporate purposes.
The Notes were offered and sold to institutional accredited investors in a private placement. The Company does not intend to register the Notes for resale under the Securities Act and the Notes may not be offered or sold absent such registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.
The Note Purchase Agreement provides that the Company shall have a Consolidated Leverage Ratio as of the end of any fiscal quarter of not greater than 3.50 to 1.00; provided that, solely with respect to the four fiscal quarters following any Qualified Acquisition (as defined in the Note Purchase Agreement), the Consolidated Leverage Ratio determined as of the end of such four fiscal quarters shall not be greater than 4.00 to 1.00. If following a Qualified Acquisition the Consolidated Leverage Ratio exceeds 3.50 to 1.00, an incremental leverage fee of 0.75% of the aggregate outstanding principal amount of the Notes will be due with respect to each fiscal quarter beginning thereafter during which the Consolidated Leverage Ratio exceeds 3.50 to 1.00 The Note Purchase Agreement provides that the Company shall have a Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of not less than 2.50 to 1.00. The Company will not at any time permit Priority Debt to exceed 15% of Consolidated Total Assets (determined as of the last day of the most recently ended fiscal quarter of the Company).
The Company may, at its option, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and a make-whole amount determined as provided in the Note Purchase Agreement for the prepayment date with respect to such principal amount.
The Note Purchase Agreement contains restrictive covenants customary for such financings, including, among other things, covenants that place limits on the Company's ability to incur liens on assets, transfer or sell the Company's assets, merge or consolidate with other persons, or enter into material transactions with affiliates. The Note Purchase Agreement also contains events of default customary for such financings, the occurrence of which will permit the purchasers of the Notes to accelerate the amounts due thereunder. The Notes rank pari passu in right of repayment with the Company's other senior unsecured indebtedness.
Morningstar's obligations under the Note Purchase Agreement are unconditionally
guaranteed by Morningstar's subsidiaries,
This summary of the Note Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, reference to the Note Purchase Agreement that is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
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.
Item 9.01 Financial Statements and Exhibits.
Include the following information:
(d) Exhibits. Exhibit No. Description 10.1 Note Purchase Agreement dated of asOctober 26, 2020 by and among Morningstar, Inc. and each of the Purchasers signatory thereto. 104 The Cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).
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