Leucadia estimates principal balance outstanding on its loan to FXCM at $122.1m

Maria Nikolova

Leucadia still has $122.1 million of principal balance outstanding on its loan to FXCM earning a coupon of 20.5%, the maximum allowed under the credit agreement.

Leucadia National Corp. (NYSE:LUK) has just published a press release on its financial results for the second quarter of 2017, with our attention focused on any mention of the loan extended to FXCM back in January 2015.

In its earnings report, Leucadia said it had nearly recovered the full amount of cash it invested in FXCM in 2015 and that it still has $122.1 million of principal balance outstanding on the loan earning a coupon of 20.5%, the maximum allowed under the credit agreement.

Leucadia also mentions that in May this year, FXCM agreed to sell its non-core interest in FastMatch to Euronext for approximately $55.6 million, with a portion held in escrow and subject to certain future adjustments including a share of a $10 million earn-out if certain performance targets of FastMatch are met. All of the proceeds from this sale will be used to pay down the Leucadia loan, while the remaining balance is set to be paid from additional non-core asset sales and operating cash flow.

The statement that Leucadia makes about FXCM in the report is rather optimistic. It says that “FXCM has restructured and stabilized its business following its exit from U.S. operations in February.”

And yet, we have to stress that Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, was much less optimistic in its most recent 10-K report. In that report, the broker warned that if Leucadia accelerates the repayment of borrowings, the broker may not have sufficient assets to repay its debt or it would have a material adverse effect on its business, operations, financial condition and liquidity.

“The Convertible Notes mature on June 15, 2018. At that time, we will be obligated to repay the aggregate principal amount of the Convertible Notes. We may not have enough available cash or be able to obtain financing at that time to meet our repayment obligations”, Global Brokerage has warned.

Furthermore, the price of Global Brokerage’s shares is still low, raising the possibility of eventual delisting of the company from NASDAQ and an eventual default.

Read this next

Inside View

Crypto Liquidity Providers: No Transaction, No Party!

One of the most integral parts of trading cryptocurrencies is ensuring seamless transactions; however, this is not always easy when you first start using cryptocurrency exchanges.

Digital Assets

Niftables launches white label NFT platform for content creators and brands

Niftables is the go-to platform for brands and creators looking to realize their NFT vision — whether they’re an individual or the biggest entertainment company in the world.

Retail FX

ACY Securities sponsors Table Tennis NSW as CFD broker bets in Australia’s youngest

ACY Securities has partnered with Table Tennis New South Wales (TTNSW) for a two-year sponsorship agreement intended to highlight the Chatswood-based multi-asset CFD broker’s brand in Australia, with a focus on the southeastern state.

Executive Moves

Peter Hetherington appointed CEO of Capital.com, Currency.com, and Shares.com

With his extensive experience driving strategy and growth for leading wealth and brokerage firms in highly regulated markets, Peter is the ideal CEO to lead the Group on its next chapter of growth and success.”

Digital Assets

Crypto platform Elwood raises $70m from Goldman Sachs, Dawn, Barclays, BlockFi, Flow, Galaxy, more

Elwood Technologies has closed a $70 million Series A funding round co-led by Europe’s largest B2B investor Dawn Capital and global investment bank, Goldman Sachs.

Industry News

Wilshire to launch Climate Change 1.5℃ Target Index with Nikkei and Hang Seng

Wilshire has announced a collective launch with Nikkei and Hang Seng to bring to market the first in a series of indexes empowering investors to transition their investments towards a low-carbon and climate resilient economy.

Industry News

Anne Boden’s Starling Bank bets big on UEFA Women’s EURO 2022 tournament

Starling Bank has launched a campaign ahead of the UEFA Women’s EURO 2022 tournament as part of its national sponsorship, the biggest ever for the bank.

Industry News

Older adults flock to financial apps as Revolut reports 215% more UK users aged 55-74 since pandemic

Data has also shown that older adults are back to travelling as the 55-64 UK age group has seen a tenfold increase in the amount spent in foreign countries over the past two years, and the 64-75 age group isn’t far behind with an 840% increase.

Industry News

Ripple replies to SEC’s last attempt and “shoves it down their throats pretty hard”

“The SEC really messed that up. How can Hinman receive legal advice from SEC lawyers for a personal opinion?”, attorney Hogan commented.