Breaking: FXCM Inc on Track with Repayment Of Leucadia Loan

According to Leucadia National's quarterly earnings report, the firm is expecting to receive over $75 million of its loan to

rp_fxcm-logo-150x150.jpgIn its quarterly earnings report, Leucadia National Corporation (NYSE:LUK) announced that it has already started receiving loan repayments from FXCM Inc (NYSE:FXCM) after it provided a critical lifeline to the foreign exchange brokerage in the aftermath of the Swiss National Bank havoc.

The creditor company detailed in its earnings announcement that it expects FXCM Inc (NYSE:FXCM) to repay more than $75 million, or over a quarter of the loan within three months from the announcement made in January.

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The details provided by Leucadia National shed light on the progress being made by FXCM on its loan repayment. According to the agreement between the companies, FXCM Inc (NYSE:FXCM) would incur a penalty of $30 million if it fails to reduce the principal of the loan to below $250 million before the 16th of April.

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From the details provided by Leucadia, it looks like FXCM Inc (NYSE:FXCM) is on track with the effort and is striving to over-deliver on repayments in order to mitigate the impact of interest rate increases on the two-year loan it secured from Leucadia after announcing a $225 million loss from the Swiss National Bank turmoil.

The terms of the agreement between Leucadia National and the foreign exchange broker revealed a quarterly interest rate hike of 1.5% limited to a maximum of 20.5%.

The repayment effort by FXCM looked increasingly challenging after December’s CFTC data showed that retail forex funds held at the brokerage in December decreased by 12%, while according to initial data, the firm experienced an outflow of $332 million of client funds in the immediate aftermath of the Swiss franc debacle when compared to data from the firm’s last quarterly report dating to September 3o.

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