Nasdaq raises $1.90 billion via US bond markets to pay for its purchase of Verafin

Darren Sinden

Nasdaq’s newly issued 10-year bond offers investors a yield of around 1.69% and are rated Baa2 by Moodys and BBB by S&P Global.

Nasdaq index 5000 pts

Stock exchange operator Nasdaq has tapped the bond markets to raise money to help fund its acquisition of Verafin, which was announced back in mid November.

Nasdaq has raised an impressive US$1.9 billion through the issue of three bonds including a 10 year tranche that priced just 75 basis points above the US 10 year treasury bond.

Verafin is a specialist in anti-financial crime and Nasdaq is paying $2.75 billion to acquire the business a move that its hopes will allow it to develop a global SaaS product aimed specifically at detecting and preventing financial crimes.

Verafin, which is based in Newfoundland on Canada’s east coast was founded back in 2003 and provides its services to more than 2000 US financial institutions via cloud-based platforms, which help them to detect track and report money laundering and financial fraud.

Nasdaq intends to combine Verafin with its existing Nasdaq Trade and Market Surveillance platforms alongside its buy-side compliance capabilities, which it supplies to around 250 banks and broker-dealers

Nasdaq’s newly issued 10-year bond offers investors a yield of around 1.69% and are rated Baa2 by Moodys and BBB by S&P Global.

Nasdaq didn’t specifically comment on the fundraising but one is forced to wonder why a business that makes its living through the listing and trading of equities chose to tap the debt markets rather than issue new shares to fund the deal?

After all Nasdaq shares have risen by just over +20% year to date and with a current market cap of $21.08 billion raising the $1.90 billion would have represented a relatively modest issuance to a business, which, is 72.59% owned by institutional shareholders.

No doubt Nasdaq’s management has a rationale for that decision, and of course, with interest rates so close to zero in the US, debt is a very cheap currency with which to fund expansion and acquisition, though perhaps we might have expected Nasdaq to wave the flag for the equity markets.

Nasdaq is just one of a number of exchanges which are investing in their data and data services capabilities in order to diversify their income streams away from listing and trading revenues.

The purchase of Verafin is still subject to regulatory approval and one of Nasdaq’s major rivals, the London Stock Exchange Group, recently received European Union approval for its $27 billion purchase of market data and trading platform provider Refinitiv, which is 45% owned by Thomson Reuters.

The deal, which will catapult the LSE into the top tier of market data and trading platform providers, is expected to close in Q1 2021, after which the London Stock Exchange could well find itself going head to head with the market leader Bloomberg.

Read this next

Digital Assets

Coinbase CEO says Chase UK’s ban on crypto “totally inappropriate”

Coinbase CEO Brian Armstrong criticized Chase UK’s decision to restrict cryptocurrency-related transactions in the UK. He called the move “totally inappropriate” and expressed his disagreement with the bank’s decision to ban its UK customers from conducting debit card or wire transfers related to cryptocurrencies.

Digital Assets

Binance CZ refutes any connection with CommEX

Changpeng “CZ” Zhao, the founder and CEO of Binance, has denied being the owner of CommEX, the company that reportedly acquired Binance’s business in Russia.

Institutional FX

Refinitiv’s spot FX volumes hit 8-month low

Refinitiv, the former Financial and Risk business of Thomson Reuters, today reported that the average daily volumes (ADV) of currency trading were $424 billion last month on the company’s main FX trading services.

Executive Moves

Integral hires industry veteran Paul Arnold as liquidity manager

Integral, a technology provider to the financial markets’ buy-side, has appointed Paul Arnold, a highly experienced FX industry professional, as its liquidity manager, according to information made public on his Linkedin profile.

Digital Assets

Terraform’s Do Kwon challenges US extradition request

Do Kwon, the crypto entrepreneur and former CEO of Terraform Labs, is opposing the U.S. Securities Exchange Commission’s request to question him about the crash of his company’s stablecoins Terra and Luna.

Digital Assets

Coinbase gets nod to offer futures for retail customers

Coinbase International Exchange has received regulatory approval from Bermuda’s financial regulator, the Bermuda Monetary Authority (BMA), to allow eligible non-US retail customers to trade perpetual futures contracts.

Inside View

How brokers can win the trading tech wars: Insights from iFX EXPO 2023

Last week’s iFX EXPO International 2023, held at the City of Dreams Mediterranean Integrated Resort in Limassol, Cyprus, welcomed a series of insightful discussions. A panel that particularly stood out focused on the role and evolution of trading technology.

Crypto Insider

Web3 Transformation: Radix’s Babylon Update Redefines User and Developer Engagement

Radix Publishing leaps forward in the decentralized world with the release of the Babylon mainnet upgrade, bridging the gap between innovative tech and user-friendly DeFi experiences.

Digital Assets Joins Forces with PayPal and Paxos for Enhanced PYUSD Exchange Experience collaborates with PayPal and Paxos to fortify its position as the premier exchange for PYUSD, marking a significant milestone in the global crypto landscape.