Business Context and Reporting Period
Morningstar, Inc. filed a Current Report on Form 8-K dated October 31, 2025. The filing reports the entry into a new multi-currency Credit Agreement and the termination of its existing credit agreement dated May 6, 2022.
Key Financial Metrics and Facility Details
The new Credit Agreement establishes a total borrowing capacity of $1.5 billion, structured as follows:
- Revolving Credit Facility: $750.0 million (five-year term).
- A-1 Facility: $375.0 million delayed draw term facility (five-year term).
- A-2 Facility: $375.0 million term facility (three-year term).
- Letters of Credit: Up to $50.0 million.
- Swingline Facility: $100.0 million sublimit.
As of October 31, 2025, the aggregate principal balance outstanding under the Revolving Credit Facility was $170.0 million, representing a rollover from the previous agreement. Interest rates are based on SOFR, SONIA, EURIBOR, Term CORRA, or BBSY plus an applicable margin ranging from 1.05% to 1.425%, dependent on the consolidated net leverage ratio.
Material Changes and Covenants
The Company terminated its prior credit agreement to replace it with the new facility. The new agreement imposes the following financial covenants:
- Consolidated Net Leverage Ratio: Not greater than 3.50 to 1.00. This increases to 4.00 to 1.00 for the four fiscal quarters following a Material Acquisition.
- Consolidated Interest Coverage Ratio: Not less than 3.00 to 1.00.
Additionally, the agreement includes restrictions on the Company's ability to pay dividends and requires unconditional guarantees from specific subsidiaries, including Morningstar Investment Management LLC and PitchBook Data, Inc.
Guidance, Outlook, and Risks
The filing does not provide updated financial guidance, revenue outlook, or management commentary regarding future performance. Proceeds from the facility are designated for refinancing existing indebtedness, paying fees, and other lawful corporate purposes. The primary risk disclosed relates to compliance with the new financial covenants and restrictions on capital distributions (dividends).
Investor Verification Checklist
- Verify the current Consolidated Net Leverage Ratio to ensure compliance with the 3.50:1.00 covenant.
- Confirm the Consolidated Interest Coverage Ratio meets the minimum 3.00:1.00 requirement.
- Review the impact of the new agreement on the Company's ability to declare dividends.
- Examine the full text of the Credit Agreement (Exhibit 10.1) for specific definitions of "Material Acquisition" and other restrictive covenants.