SecProbe.io

CORRESP
1
filename1.htm

LETTER TO THE SEC

November 14, 2005

Michael McTiernan, Esq.,

       Securities and
Exchange Commission,

               100
F Street, N.E.,

                      Washington,
D.C. 20549.

Re: IntercontinentalExchange, Inc.—Form S-1
(File No. 333-123500)

Dear Mr. McTiernan:

    Earlier today, IntercontinentalExchange, Inc. (the
    “Company”) filed Amendment No. 8 (the
    “Amendment”) to the above-referenced registration
    statement (the “Registration Statement”) in connection
    with its proposed initial public offering (the
    “Offering”). The Amendment primarily related to:

    •     an increase in the number of
    shares being offered in the Offering from 10,000,000 to
    16,000,000 shares of common stock (with all of the additional
    6,000,000 shares being sold by the selling stockholders and none
    being sold by the Company);

    •     an increase in the
    anticipated range of the initial public offering price from
    $18.00 to $20.00 per share to $24.00 to $26.00 per share; and

    •     modifications to the
    underwriting section to reflect (i) a corresponding
    increase in the directed share program from 500,000 shares to
    700,000 shares and (ii) the Company’s reservation to
    sell directly up to 2,500 shares of common stock to executive
    officers in the directed share program, rather than through the
    underwriters.

         The Staff has orally requested a written analysis by the Company
    as to whether these changes would materially change the
    disclosure contained in the Registration Statement at
    effectiveness as compared to that contained in the preliminary
    prospectus, dated October 27, 2005 (the “Preliminary
    Prospectus”). In response to the Staff’s oral request,
    we have set forth below, on behalf of the

IntercontinentalExchange, Inc.

Page 2

    Company, the Company’s determination that the changes set
    forth in the Amendment do not materially change the disclosure
    relating to the Offering at the time the Preliminary Prospectus
    was circulated. The Company believes that the changes reflected
    in the form of preliminary prospectus included in the Amendment
    are not material, due to the following:

    •     The additional shares being
    sold are being offered by the selling stockholders and not by
    the Company. As a result, the capitalization of the Company on a
    pro forma basis after giving effect to the Offering will not
    change from the capitalization disclosed in the Preliminary
    Prospectus. In addition, the additional 6,000,000 shares being
    sold have been allocated among seven of the existing selling
    stockholders identified on pages 154-158 of the Preliminary
    Prospectus and the Amendment. The amount being sold by three of
    the Company’s four largest selling stockholders remains
    unchanged, with an increase in the number of shares being
    sold by Morgan Stanley Capital Group, Inc., the Company’s
    largest stockholder, of 222,300 shares, which further reduces
    Morgan Stanley’s ownership interest in the Company by 0.4%,
    an amount the Company does not believe to be significant. In
    addition, the Company does not believe that the ownership
    interest of the seven existing selling stockholders has changed
    materially in the Amendment from the Preliminary Prospectus, in
    each case, further reducing its respective ownership interest in
    the Company.

    •     The price range increased,
    resulting in increased net proceeds to the Company of
    $14.0 million from $39.3 million, which the Company
    believes is not material based on its anticipated use of net
    proceeds (to repay outstanding debt of $13.0 million and
    for general corporate purposes). The $14.0 million increase
    represents only a 12.5% increase to the Company’s cash
    position based on the cash and cash equivalents, restricted cash
    and restricted short-term investments, short-term investments
    and long-term investments in the Company’s consolidated
    balance sheet data on page 11 of the Amendment. Finally,
    the increase in proceeds to the Company is a favorable change
    and certainly does not disadvantage or impact the Company or
    potential investors in any negative way. Accordingly, the
    Company believes the use of proceeds to the Company did not
    materially change. While the amount of net proceeds to the
    selling stockholders increased, it increased simply to reflect
    the increase in the number of shares being sold and the
    increased price range, and the Company will not receive any of
    the net proceeds of the selling stockholders. Accordingly, the
    Company does not believe that the increase in net proceeds to
    the selling stockholders is material to an investor’s
    decision to invest in the Company. See “Use of
    Proceeds” on page 33 of the Amendment.

    •     As reflected in the
    Amendment, the number of shares reserved under the directed
    share program increased by 200,000 shares to 700,000 shares
    simply to reflect the increased offering size. In addition, as
    reflected in the Amendment, the Company has elected to sell up
    to 2,500 shares directly to executive officers as part of the
    directed share program. The Company believes that its election
    to sell

IntercontinentalExchange, Inc.

Page 3

    shares directly is insignificant given that any such sale will
    be made at the initial public offering price and, moreover, the
    amount involved is immaterial in relation to the aggregate
    number of shares being offered by the Company and the aggregate
    number of shares that have been reserved for sale under the
    directed share program.

         For the reasons set forth above, the Company does not believe
    that the changes set forth in the Amendment materially change
    the disclosure relating to the Offering at the time the
    Preliminary Prospectus was circulated such that recirculation
    would be necessary or appropriate. In addition, we have been
    informed that Cleary Gottlieb Steen & Hamilton LLP, counsel
    to the underwriters, concurs with this analysis and with the
    view of the Company and Sullivan & Cromwell LLP that
    recirculation of an amended Preliminary Prospectus is not
    required under these circumstances.

* * * *

Any questions or comments with respect to the foregoing may be
communicated to the undersigned at (212) 558-4175.

    Very truly yours,

    /s/ Catherine M. Clarkin

cc:        Johnathan H. Short
(IntercontinentalExchange, Inc.)

David B. Harms
(Sullivan & Cromwell LLP)