November 2, 2018 | AtoZ Markets
Investment banking giant Jefferies has filed its quarterly report with the SEC last night. The document shows the details about the progress of the loan agreement between Leucadia National company and FXCM.
Earlier in 2015, Jefferies bailed out the forex brokerage company with a $300M loan. The terms of the agreement between the firms ensured that the creditor will receive sizeable returns on its investment.
Until the end of the Q3 of 2018, Jefferies received $347M of principal, interest, and fees from its initial $279M investment in FXCM.
Under the terms of the credit agreement, the loan was due by January 2017. The term duration was subsequently extended until January 2019. With an initial interest rate of 10% per annum, which has been increasing by 1.5% per annum each quarter. In addition to this, the current rate on the loan reached the cap in the agreement at 20.5% per annum.
FXCM’s $15.4M Loan Repayment in 2018
All through the initial nine months of this current year, FXCM reimbursed Jefferies $15.4M of principal amount with interest. The rest of the sum which the business owes to its creditor is $70.6M. Jefferies recorded profits in terms of the loan of $1.3M and $16.4M which was during the three and nine months that finished on September 30, 2018.
The speed of the loan reimbursement has been to some degree slower when contrasted with 2017. At the time the loan creditor posted incomes of $2.3M and $17.6M during the three and nine months that ended on September 30, 2017. After the most recent corrections to the loan agreement from November a year ago, Jefferies holds a half voting interest FXCM. The organization is likewise qualified for up to 75% of the equity.
Not long ago, FXCM focused on another brand identity. The business turned into “a Leucadia company” and Jefferies is accounting its investment as one into a related organization.
Moreover, Jeffries and FXCM are taking advantages of their ties and have distinguished working cooperative synergies. Back in April, the company declared the extension of their prime brokerage relationship.
Think we missed something? Let us know in the comments section below.