Leucadia National Corporation and FXCM Announce $300 Million Financing to Permit FXCM to Continue Normal Operations
NEW YORK--(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.
Leucadia
Laura Ulbrandt, 212-460-1900
or
FXCM
Jaclyn
Klein, 646-432-2463
Source: Leucadia National Corporation
