Cboe Global Markets

The stable outlook on Cboe reflects S&P Global Ratings' assumption that leverage will remain below 1.75x on a sustained basis. We expect the financial safeguards at EuroCCP will not weaken with the launch of the new trading/clearing offering in European equity derivatives. We could lower the rating if: Leverage exceeds 1.75x following a series of acquisitions or aggressive financial policies; or Financial safeguards at EuroCCP unexpectedly weaken. We could raise the ratings if Cboe keeps reducing its dependence on flagship products and transaction-based revenue, while financial safeguards at EuroCCP do not weaken. S&P Global economists forecast the U.S. GDP to increase by 6.7% and 3.7%, in 2021 and 2022, respectively. While GDP does not affect trading volumes for financial market

...Cboe Global Markets has a leading position among options exchanges in the U.S. It has a 99% market share in index equity options and a 30.5% market share overall year to date through July (including single-name equity options). The company is more dependent than peers on volatile trading revenue. Transaction-related revenue represented about 63% of total revenue for Cboe in 2020--far above the levels for Nasdaq and ICE. Cboe operates with low leverage. S&P Global Ratings projects debt to EBITDA will be about 1.4x by the end of 2021. It is home to three of the most widely recognized products traded and used globally: VIX futures, VIX options, and S&P 500 options. VIX futures and options and S&P 500 options represented 52% of total net transaction fees in the first two quarters of 2021. Despite recent improvements, EuroCCP has weaker financial safeguards overall than most clearinghouses we rate. Netherlands-based EuroCCP, acquired in July 2020, is more concentrated than most other clearinghouses,...

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