FXCM Inc. said Thursday that it has used some of the proceeds
from the sale of its Japanese unit to repay another $54 million of
its loan from Jefferies Group LLC parent Leucadia National
Corp.
FXCM, a New York-based foreign-exchange broker, said in March
that it was in the process of disposing of noncore assets after it
was left chasing $276 million from retail clients who were caught
on the wrong side of bets on the Swiss franc in January.
The Swiss franc surged nearly 30% against the euro in the
minutes following the Swiss National Bank's surprise decision to
stop reining in the currency's value. Collateral put down to
guarantee those bets wasn't sufficient to cover the currency move
on that day, which was unprecedented. It has said that it would
forgive the majority of the negative balances.
To continue operations, FXCM secured a $300 million loan from
Leucadia. FXCM said it has now repaid $66 million of the loan,
bringing its total balance as of April 1 to $244 million and
allowing the company to avoid a $30 million contingent financing
fee. FXCM said it plans to repay an additional $12 million of the
loan in the coming weeks.
FXCM announced in late March that it had agreed to sell its
Japan business to a brokerage unit of e-commerce giant Rakuten Inc.
for $62 million, as part of its effort to sell noncore assets to
repay its debt.
FXCM said the sale exceeded its expectations and now expects
"robust and competitive auctions" for the other noncore assets it's
planning to sell.
FXCM has also stopped trading a number of currencies, including
the Hong Kong dollar and Danish krone, to avoid volatility caused
by possible future intervention by governments in currency
markets.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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