Investing.com - Struggling online retail currency broker FXCM saw shares plunge 87% after the open on Tuesday, after providing details regarding the $300 million rescue package it received from Leucadia National (NYSE:LUK) last week.
According to the agreement, the initial interest rate of 10% will rise by 1.5% each quarter as long as the loan is outstanding to a maximum of 17%. The package also includes limitations on FXCM’s ability to merge, dissolve or sell assets.
As part of the agreement, Leucadia will get a percentage of the proceeds from certain transactions, such as any sale of assets or a dividend.
FXCM also has to pay a deferred financing fee of $10 million and may have to pay an additional fee of up to $30 million if certain conditions are not met.
FXCM warned last Thursday that volatility in currencies markets following the Swiss National Bank's shock decision to abandon its minimum exchange rate cap against the euro triggered losses that left its customers owing it about $225 million.
On Friday, FXCM and Leucadia, the holding company for investment bank Jefferies Group, announced the $300 million two-year financing agreement.
FXCM (NYSE:FXCM) shares plummeted $10.84, or 85.83%, to $1.79 from a closing price of $12.63 on January 16.
Meanwhile, U.S. stock markets were lower after the open. The Dow 30 shed 0.35%, the S&P 500 dipped 0.2%, while the Nasdaq 100 declined 0.1%.
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FXCM crashes 87% in New York after disclosing loan details
Published 01/20/2015, 10:15 AM
Updated 01/20/2015, 12:55 PM
FXCM crashes 87% in New York after disclosing loan details
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