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MSCI cash stays high, despite notes sale, redemption and acquisition
By Devika Patel
Knoxville, Tenn., Oct. 26 – MSCI Inc. has a cash balance of $1.3 billion, despite several cash-draining transactions during the last quarter, including its issuing $700 million of 3¼% 12-year notes and redeeming $500 million of 5 3/8% notes due 2027, as well as completing its $950 million acquisition of Real Capital Analytics.
“We ended the quarter with a cash balance of approximately $1.3 billion after funding the RCA acquisition, executing a $700 million notes offering and redeeming $500 million in higher-coupon notes,” chief financial officer Andrew C. Wiechmann said on the company’s third quarter ended Sept. 30 earnings conference call on Tuesday.
“With this strong capital position, we remain focused on reinvesting in our business as a first priority,” he said.
On Aug. 2, MSCI announced a definitive agreement to acquire Real Capital Analytics for $950 million in cash. The acquisition settled on Sept. 13.
Cash and cash equivalents were $1,284,664,000 as of Sept. 30, 2021, compared to $1,300,521,000 as of Dec. 31, 2020. MSCI typically seeks to maintain minimum cash balances globally of approximately $200 million to $250 million for general operating purposes, the company stated in a Tuesday press release.
Total outstanding debt as of Sept. 30 was $4.2 billion.
The total debt to adjusted EBITDA ratio was 3.7x. MSCI stated in Tuesday’s release that it seeks to maintain total debt to adjusted EBITDA in a target range of 3x to 3.5x.
On Aug. 3, the company priced $700 million of 12-year senior notes (Ba1/BB+/BBB-) at par to yield 3¼% in a drive-by. The deal settled on Aug. 17.
The yield printed 12.5 basis points inside of yield talk in the 3½% area, which was also the initial guidance.
The notes can be called starting Aug. 15, 2027 at par plus half the coupon.
Left lead bookrunner Morgan Stanley & Co. LLC will bill and deliver.
The New York-based finance company earmarked the proceeds to fully repay its $500 million of 5 3/8% senior notes due 2027 and for general corporate purposes.
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