Moody's has placed the Ba3 corporate family rating and Ba3senior secured bank credit facility rating of under reviewfor upgrade.
The action follows the announcement that Bats has enteredinto a definitive agreement to be acquired by CBOE Holdings Inc.
Moody's said the review for upgrade reflects the anticipationthat the credit profile of the combined entity would be stronger than Bats on astand-alone basis. Bats would benefit from the combined entity's greaterrevenue diversification and reduced reliance on transaction-based revenues.Moreover, CBOE plans to suspend its share repurchase program and focus onde-leveraging following the completion of the transaction. Additionally, therating agency said CBOE has a strong and stable track record of favorableoperating margins and financial flexibility. CBOE to date has been successfulin deploying the benefits of its operating leverage via sustained revenuegrowth and the successful management of a relatively predictable cost base.
Since the Bats senior secured facility will be refinanced,the review will focus on the likely closing of the transaction, Moody's said.