Hi Everyone, I know you have been waiting for more information from me, and I would like to thank you for your patience. I wanted to post sooner but the nature of such announcements required me to wait until the official press release: January 16, 2015 Leucadia National Corporation and FXCM Announce $300 Million Financing to Permit FXCM to Continue Normal Operations NEW YORK--(BUSINESS WIRE)-- Leucadia National Corporation (NYSE: LUK) and FXCM (NYSE: FXCM) today announced that Leucadia would be providing $300 million in cash to FXCM and its subsidiaries (collectively "FXCM") that will permit FXCM to meet its regulatory-capital requirements and continue normal operations after yesterday's loss of $225 million due to the unprecedented actions of the Swiss National Bank. Under the terms of the agreements, Leucadia is investing $300 million in cash into FXCM in the form of a $300 million senior secured term loan with a two-year maturity and an initial coupon of 10%. The term loan obligations are guaranteed, on a secured basis, by certain of FXCM's domestic subsidiaries. In addition, Leucadia will receive, in the event of a sale of FXCM or its subsidiaries, a certain percentage of the sale proceeds and, in the event FXCM makes other distributions on account of its equity, a corresponding payment for its own account. This transaction is expected to close this afternoon. Drew Niv, Chief Executive Officer of FXCM, stated: "We could not be more grateful to Leucadia and its team for their rapid and effective response and to our regulators, who have been willing to work with us through this challenging process. Leucadia's support and this financing are by far the best alternative for FXCM, our customers, our shareholders, and all other relevant constituencies. We are pleased to continue to act as the leading online provider of foreign exchange trading and related services to retail and institutional customers worldwide." Click to see full press release: bit.ly/1ua85Ve
Thanks, can you confirm when this transaction has gone through to confirm all is fine and nothing went wrong. So we've got 2 years for FXCM to pay back 300Mil or then there closed, better than today I guess.
@Jason Rogers congratulations! wonderful news you'll stay in business. I wish you'll recover from that loss! It's neither your fault nor ours, just that bunch of SNB buggers are to blame. and thanks for posting!
They've got 2 years to prove they've cleaned up their risk controls and then they can likely refinance whatever they still need in terms of regulatory capital at rates better than 10% interest secured by everything that can be nailed down.
well this is quite a warning on the dangers of leverage........ something like this seems to come out of the blue every now and then...... if overleveraged then all you can do is hope you are not standing in its way when it happens.
Shit like this is what killed LTCM. people get complacent and BOOM! That black swan can undo 10 years of hard work in one swoop. People forget it and then get really complacent when it comes to risk, they start to believe they are the ultimate trader, let ego take over and forget risk management.
Perhaps some are less than happy at the 10% levy on the lifeline, but I'd guess it's the typical overshoot.
"The irony here is that "day traders" would have most likely been flat at that time - and hence safe." no irony, daytrading is a lot safer. but it's also a lot harder and people tend to miss the really good overnight moves.