FXCM Inc. announced further details on the agreement reached with Leucadia National Corporation that permitted FXCM to meet its regulatory capital requirements and continue normal operations after significant losses were incurred due to unprecedented actions by the Swiss National Bank. FXCM Holdings, LLC (Holdings) and FXCM Newco, LLC (Newco), a newly-formed wholly-owned subsidiary of Holdings, entered into a credit agreement with Leucadia on January 16, 2015 for a $300 million, two-year term loan. The net proceeds of the loan (approximately $279 million) will replace capital in FXCM regulated entities to cover negative client balances and pay down outstanding revolving debt.

In connection with the credit agreement, Holdings formed Newco and contributed all of the equity interests owned by Holdings in its subsidiaries to Newco. The loan 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 17% per annum (before giving effect to any applicable default rate). It is also subject to various conditions and terms such as requiring mandatory prepayments, including from proceeds of dispositions, condemnation and insurance proceeds, debt issuances, and equity issuances.

The credit agreement includes a variety of restrictive covenants, including, but not limited to, limitations on the ability to merge, dissolve, liquidate, consolidate or sell, lease or otherwise transfer all or substantially all assets; limitations on the incurrence of liens; limitations on the incurrence of debt by subsidiaries of the company; and limitations on transactions with affiliates, without the prior consent of the lender. The credit agreement requires monthly payments of the term loan from proceeds received during the immediately preceding calendar month from accounts receivable related to the customer debit balances referenced above. 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 the borrowers to pay a deferred financing fee in an amount equal to $10 million, with an additional fee of up to $30 million becoming payable in the event the aggregate principal amount of the term loan outstanding on April 16, 2015 is greater than $250 million or the deferred financing fee of $10 million (plus interest) has not been paid on or before such date.