Credit Agreement and Short-term Financing |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Debt Disclosure [Abstract] | |
| Credit Agreement and Short-term Financing | 11. Credit Agreement and Short-term Financing Credit Agreement On August 9, 2023, the Company entered into a three-year revolving credit facility (the “2023 Credit Agreement”) provided by a syndicate of lenders and JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, which provided for aggregate commitments totaling $750.0 million. As of December 31, 2025, the Company had $220.0 million of borrowings and $0.1 million in letters of credit outstanding and $529.9 million in available borrowing capacity under the 2023 Credit Agreement. On February 4, 2026, the Company entered into an amended and restated three-year revolving credit facility (the “Credit Agreement”) provided by a syndicate of lenders and JPMorgan, as administrative agent, which amends and restates the 2023 Credit Agreement in its entirety. The Credit Agreement provides for aggregate commitments totaling $750.0 million (the “Credit Facility”), consisting of a revolving credit facility, a $5.0 million letter of credit sub-limit for standby letters of credit and a $380.0 million sub-limit for swingline loans. Subject to satisfaction of certain specified conditions, the Company may upsize the Credit Facility by up to $375.0 million in total. The incremental facility is uncommitted, and it is possible that the Company may not be successful in obtaining such commitments from existing or new lenders in the amount desired or at all. The Credit Agreement amends the 2023 Credit Agreement to, among other things: (1) extend the maturity of the Credit Facility from August 9, 2026 to February 2, 2029, with the Company’s option to request up to two additional 364-day extensions at the discretion of each lender and subject to customary conditions; (2) eliminate the 0.10% credit spread adjustment previously added to the interest rate on Secured Overnight Financing Rate (“SOFR”) based borrowings; and (3) increase the maximum amount of cash that may be netted against debt for purposes of calculating the Company’s Consolidated Total Leverage Ratio (as defined in the Credit Agreement) from $30.0 million to $200.0 million. The Credit Agreement requires that the Company satisfy certain covenants, including a requirement not to exceed a maximum consolidated total leverage ratio.
Borrowings under the Credit Agreement bear interest at a rate per annum equal to an alternate base rate or the adjusted term SOFR rate, plus an applicable margin that varies with the Company’s consolidated total leverage ratio. Borrowings under the 2023 Credit Agreement bore interest on substantially similar terms, except that SOFR-based borrowings included an additional 0.10% credit spread adjustment that was eliminated under the Credit Agreement. The Company repaid $63.0 million of borrowings under the Credit Agreement and incurred $2.7 million of interest expense during the three months ended March 31, 2026, and had no repayments and incurred no interest expense during the three months ended March 31, 2025. As of March 31, 2026, the Company had $157.0 million of borrowings and $0.1 million in letters of credit outstanding and $592.9 million in available borrowing capacity under the Credit Agreement. Uncommitted Collateralized Agreements In connection with their self-clearing operations, certain of the Company’s U.S. and U.K. operating subsidiaries maintain agreements with a settlement bank to allow the subsidiaries to borrow in the aggregate of up to $500.0 million on an uncommitted basis, collateralized by eligible securities pledged by the subsidiaries to the settlement bank, subject to certain haircuts. Borrowings under these agreements will bear interest at a per annum equal to 1.00% plus the higher of (i) the upper range of the Federal Funds Rate, (ii) one-month SOFR plus an applicable margin or (iii) 0.25%. The Company incurred $0.1 million of interest expense on borrowings under such agreements during the three months ended March 31, 2026, and no interest expense during the three months ended March 31, 2025. As of March 31, 2026, the Company had $71.3 million in borrowings outstanding, secured by $75.1 million of receivables from broker-dealers, clearing organizations and customers pledged to the Company’s settlement bank. As of March 31, 2026, the Company had $428.7 million in available uncommitted borrowing capacity under such agreements. Short-term Financing Under arrangements with their settlement banks, certain of the Company’s U.S. and U.K. operating subsidiaries may receive overnight financing in the form of bank overdrafts. The Company incurred interest expense on such overnight financing of $0.2 million during each of the three months ended March 31, 2026 and 2025. As of March 31, 2026, the Company had no overdrafts payable outstanding. |