FXCM Leucadia loan still $192.7 million outstanding


23 February, AtoZForex.com, Lagos – Leucadia National Corporation’s (Leucadia) recent year end report as of December 31, 2015, the firm has provided valuable insight to its ongoing deal with FXCM Inc. As a brief reminder, Leucadia provided FXCM with a $300 million loan about a year back, following the massive losses recorded by the FX firm during the January 15 Swiss Franc black Thursday event.

FXCM Leucadia loan break down

Breaking down the status of the FXCM Leucadia loan repayment,  the deal involves a “$300 million two-year senior secured term loan with rights to a variable proportion of certain distributions in connection with an FXCM sale of assets or certain other events”, it is important to note that Leucadia still holds a right to require a sale of FXCM beginning in January 2018. The initial interest payable on the loan is 10% per annum, increasing by 1.5% per annum each quarter, not to exceed 20.5% per annum.  Further breakdown includes 100% until amounts due under the loan are repaid; 50% of the next $350 million; then 90% of the next $500 million (this was an amount initially set at a range between $500 million to $680 million and based on payments made by FXCM to us through April 16, 2015, this amount became $500 million); and 60% of all amounts thereafter.

FXCM has succeeded in paying $144.7 million of principal, interest and fees as of December 2015. With $192.7 million still outstanding under the credit agreement as of this date.

Debt restructuring

Back in December 2015, FXCM Inc. has released an update as regards its loan deal with Leucadia investment. It is understood that both parties in the FXCM Leucadia loan deal were geared towards maintaining a mutually beneficial relationship, hence, a proposal to restructure the existing Letter Agreement such that both companies enjoy the benefits of a sustainable long-term and value-enhancing strategy. However, all discussions were still ongoing and no decision had been reached at the time. Leucadia has now clarified that discussions over the possible restructuring is still ongoing, and for now, “there can be no assurances that an agreement will be reached.” So far, FXCM has upheld all ends of the bargain, which may actually put them in position to renegotiate terms successfully.

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