News 
Market Data 
Discover
Replies to post #15737 on Global Brokerage Inc. (GLBR)
In connection with this transaction, Holdings formed Newco and contributed all of the equity interests owned by Holdings in its subsidiaries to Newco.
FXCM Inc. is a holding company that was incorporated as a Delaware corporation on August 10, 2010 and its sole asset is an equity interest in FXCM Holdings, LLC, of which FXCM Inc. is the sole managing member. Unless the context suggests otherwise, specifically, where “Holdings” refers to FXCM Holdings, LLC and the “Corporation” refers to FXCM Inc., references in this report to “FXCM,” the “Company,” “we,” “us” and “our” refer to FXCM Inc. and its consolidated subsidiaries.
On January 16, 2015, we entered into a credit agreement with Leucadia National Corporation (“Leucadia”), pursuant to which Leucadia provided us with a $300.0 million term loan, which permitted us to maintain compliance with regulatory capital requirements and to continue normal operations. The loan from Leucadia has an initial interest rate of 10% per annum, increasing by 1.5% per annum each quarter for so long as it is outstanding, but in no event exceeding 20.5% per annum (before giving effect to any applicable default rate). The credit agreement requires monthly payments of the term loan from proceeds received during the immediately preceding calendar month from accounts receivable related to customer debit balances. The obligations under the loan are guaranteed by certain domestic subsidiaries of Holdings and secured by substantially all of the assets of Holdings and certain of its subsidiaries. The credit agreement also requires us to pay a deferred financing fee in an amount equal to $10.0 million, with an additional fee of up to $30.0 million becoming payable in the event the aggregate
1
principal amount of the term loan outstanding on April 16, 2015 is greater than $250.0 million or the deferred financing fee of $10.0 million (plus interest) has not been paid on or before such date.
The terms and conditions of the financing include provisions whereby we will pay in cash to Leucadia a percentage of the net proceeds received in connection with certain transactions, including dividends and distributions, according to the schedule below:
•
Amounts due under Leucadia term loan, including fees (100% Leucadia, 0% FXCM)
•
Next $350 million (50% Leucadia, 50% FXCM)
•
Next amount equal to two times the balance outstanding on the term loan and fees as of April 16, 2015, such amount not to be less than $500 million or more than $680 million (90% Leucadia, 10% FXCM)
•
All aggregate amounts thereafter (60% Leucadia, 40% FXCM)
In connection with the transaction, we formed FXCM Newco, LLC (“Newco”) and contributed all of our equity interests in our subsidiaries to Newco. In addition, FXCM, Holdings and Newco have agreed that beginning in three years and thereafter, upon the request of Leucadia or its assignees, they will cause the sale of Holdings, Newco and/or their respective subsidiaries' assets or equity interests for cash at the highest reasonably available price. Upon the occurrence of such event, Newco will pay Leucadia and its assignees in accordance with the methodology described above.
As the Company announced on January 28, 2015, we have made the business decision to forgive approximately 90% of the clients who incurred debit balances in certain jurisdictions as a result of the SNB announcement on January 15, 2015. We notified certain clients (such as institutional, high net worth and experienced traders who generally maintain higher account balances) that sustained debit balances as a result of the market events on January 15, 2015, that they will be required to pay their debit balances, pursuant to the terms of the FXCM master trading agreements. This group represents approximately 10% of clients who incurred debit balances, but comprises over 60% of the total debit balances owed. The Company is considering various legal options to collect these debit balances. In light of the numerous uncertainties associated with these collection options, we cannot provide any assurance that we will be successful in recovering any portion of the clients' debit balances.
As the events of January 15, 2015 occurred after year-end, these events do not affect our Consolidated Statement of Financial Position as of December 31, 2014 or our Consolidated Statement of Operations for the year then ended because the events do not relate to facts and circumstances that existed at December 31, 2014.
Which is why all the arguments about shareholder value being wiped out are false.
