Leucadia National Corporation and FXCM Announce $300 Million Financing to Permit FXCM to Continue Normal Operations
January 16 2015 - 3:55PM
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.”
Richard B. Handler, Chief Executive Officer, and Brian P.
Friedman, President of Leucadia, stated: “We are pleased to have
been able to provide this critical financing to FXCM that is
designed to maintain FXCM’s financial strength and allow it to
prosper going forward. We believe this is an attractive investment
for Leucadia and we look forward to a mutually beneficial
relationship with FXCM management. We want to thank the entire FXCM
team, with whom Leucadia and Jefferies worked over the past
approximately 36 hours to achieve this solution for FXCM.”
UBS acted as financial advisor and Weil Gotshal and Manges, LLP
as legal advisor to FXCM. Jefferies originated and advised Leucadia
in respect of this transaction and Skadden, Arps, Slate, Meagher
and Flom LLP acted as legal advisors to Jefferies and Leucadia.
About Leucadia
Leucadia National Corporation (NYSE: LUK) is a diversified
holding company engaged through its consolidated subsidiaries in a
variety of businesses, including investment banking and capital
markets, beef processing, manufacturing, energy projects, asset
management and real estate. The Company also owns equity interests
in operating businesses that are accounted for under the equity
method of accounting, including a commercial mortgage banking and
servicing business, automobile dealerships and telecommunications
services in Italy.
About FXCM Inc.
FXCM Inc. (NYSE:FXCM) is a global online provider of foreign
exchange (forex) trading and related services to retail and
institutional customers world-wide.
At the heart of FXCM's client offering is No Dealing Desk forex
trading. Clients benefit from FXCM's large network of forex
liquidity providers enabling FXCM to offer competitive spreads on
major currency pairs. Clients have the advantage of mobile trading,
one-click order execution and trading from real-time charts. FXCM's
U.K. subsidiary, Forex Capital Markets Limited, also offers CFD
products with no re-quote trading and allows clients to trade oil,
gold, silver and stock indices along with forex on one platform. In
addition, FXCM offers educational courses on forex trading and
provides free news and market research through
DailyFX.com.
Trading foreign exchange and CFDs on margin carries a high level
of risk, and may not be suitable for all. Read full
disclaimer.
Disclosure Regarding Forward-Looking Statements
Certain statements contained herein may constitute
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, Section 21E of the Securities Exchange
Act of 1934 and/or the Private Securities Litigation Reform Act of
1995, which reflect Leucadia’s and FXCM's current views with
respect to, among other things, their respective operations and
financial performance in the future. These forward-looking
statements are not historical facts and are based on current
expectations, estimates and projections about each company's
industry, management's beliefs and certain assumptions made by
management, many of which, by their nature, are inherently
uncertain and beyond our control. Accordingly, readers are
cautioned that any such forward-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict
including, without limitation, risks associated with the events
that took place in the currency markets on January 15, 2015 and the
impact to FXCM's capital structure, risks associated with the
FXCM's ability to recover all or a portion of any capital losses,
risks related to its dependence on FX market makers, market
conditions and those other risks described under "Risk Factors" in
FXCM Inc.'s Annual Report on Form 10-K and other reports or
documents FXCM files with, or furnishes to, the SEC from time to
time, which are accessible on the SEC website at sec.gov.
This information should also be read in conjunction with the each
company's Consolidated Financial Statements and the Notes thereto
contained in the companies’ respective Annual Reports on Form 10-K,
and in other reports or documents the companies file with, or
furnish to, the SEC from time to time, which are accessible on the
SEC website at sec.gov.
LeucadiaLaura Ulbrandt, 212-460-1900orFXCMJaclyn Klein,
646-432-2463
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