FXCM Stretches Final Maturity of its Credit Facility and Tops-Up Total Commitments to $205 million

FXCM continues its M&A flag with the announcement of an increase and extension of its credit facility. The US FX

fxcm_logoLeading financial services broker dealer, FXCM, has announced that it is amending its credit facility and total commitments. In a press notification, the listed broker stated that it has extended the final maturity date of it credit facility, in addition, the firm will increase its total commitments.

The current amendments come two years after the firm made an announcement of a $75 million credit facility in December 2011. Under the extension, the credit facility will be available for an additional three years until December 2016. The increase in commitments crosses the two hundred million mark at $205 million, and the credit facility has an accordion feature which means it can be further extended in value to $250 million under special conditions.

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A credit facility is typically used by firms to enhance their liquidity, commonly referred to the building blocks of up and coming M&A activity. The 2011 credit facility came on the back of the milestone acquisition of ODL Securities and the purchase of Japanese broker Foreland Forex Co. 2013 has been an interesting year for FXCM, the NYSE listed firm has been on a shopping spree after its bid for GAIN Capital was rejected.

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Drew Niv, FXCM Inc.’s Chief Executive Officer, commented in a statement: “We are pleased to have extended the maturity of our revolving credit facility which will provide us with substantial long-term liquidity and flexibility to execute on our strategic objectives. We are also extremely appreciative of the support and confidence in our company our existing lenders have displayed through their increased commitments.”

Drew Niv, CEO FXCM
Drew Niv, CEO FXCM

FXCM’s share price has been on a gradual decline from its 52 week high after posting Q3 figures earlier in the month, today the stock is down 1% trading at 15.52.

UK-based London Capital Group has been under the ‘acquisition’ radar as reported by Forex Magnates in February, recently the firm had divested parts of its business such as ProSpreads. Things have gone from bad to worse for the firm which saw its CFO, Siobhan Moynihan, submit her resignation on the 15th of November.

With costs spiralling and opportunities fading for FX brokers, getting acquired is a viable option and exit strategy. Another UK-based broker, One Financial, is believed to be a potential candidate, according to a person close to the matter.

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