Leucadia National Corp. (LUK) announced on Friday an agreement to provide $300 million in financing with an initial coupon of 10% — a steep price at a time of rock-bottom interest rates – to FXCM Inc. (FXCM), the New York-based forex broker who got hit yesterday with big losses from the impact of a change in Swiss currency policy. As part of the agreement, Leucadia, which owns brokerage firm Jefferies Group, will receive a certain percentage of the proceeds if FXCM or its subsidiaries are sold.
“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,” Drew Niv, FXCM’s chief executive, said in a statement. FXCM, the largest U.S. retail foreign-exchange broker, also said that the transaction allows it to “continue normal operations”.
Shares of FXCM had nosedived as much as 92% to $0.98 Friday morning before they got halted. After the Leucadia deal hit the wires, FXCM’s stock, which in the past 52 weeks had traded between a low of $12.05 and a high of $17.97, rebounded to $4.32. That’s still down a staggering 192% from the prior day’s closing price of $12.63.