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FXCM > SEC Filings for FXCM > Form 8-K on 3-Jun-2013All Recent SEC Filings

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Form 8-K for FXCM INC.


3-Jun-2013

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation o


Item 1.01 Entry into a Material Definitive Agreement.

Purchase Agreement

On May 28, 2013, FXCM, Inc. (the "Company") entered into a purchase agreement (the "Purchase Agreement") with Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several purchasers named in Schedule A thereto (the "Initial Purchasers"), pursuant to which the Company agreed to sell $150.0 million aggregate principal amount of 2.25% Convertible Senior Notes due 2018 (the "Firm Notes") and, at the option of the Initial Purchasers, up to an additional $22.5 million aggregate principal amount of 2.25% Convertible Senior Notes due 2018 (the "Option Notes" and, together with the Firm Notes, the "Notes"). The Notes were sold to the Initial Purchasers in a private placement, in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act") and resold by the Initial Purchasers to "qualified institutional buyers" pursuant to the exemption from registration set forth in Rule 144A under the Securities Act. The Company is relying on these exemptions from registration based in part on representations made by the Initial Purchasers in the Purchase Agreement.

On May 30, 2013, the Initial Purchasers exercised their option in full in respect of the Option Notes. On June 3, 2013, the Company issued and sold to the Initial Purchasers $172.5 million aggregate principal amount of the Notes upon payment pursuant to the Purchase Agreement.

The Purchase Agreement includes customary representations, warranties and covenants. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities, and contribute to payments which the Initial Purchasers may be required to make in respect of any such liabilities.

The Company estimates that the net proceeds from the offering of the Notes will be approximately $167.3 million, after deducting the Initial Purchasers' discounts and commissions. On June 3, 2013, the Company used approximately $10.5 million of the net proceeds from the Offering to fund the cost of the Convertible Bond Hedge Transactions described below (after such cost was partially offset by the proceeds to the Company from the Warrant Transactions described below), and provided the remainder of the net proceeds to FXCM Holdings, LLC ("Holdings") pursuant to agreements with Holdings pursuant to which Holdings will agree to provide the Company with the cash necessary to make any payments required under the Notes. The Company expects Holdings to use such net proceeds, after paying offering expenses, to repay approximately $80.0 million of outstanding borrowings under Holdings' revolving credit facility and the remainder for general corporate purposes, including potential future acquisitions.

The foregoing description of the Purchase Agreement is qualified in its entirety by the copy thereof which is attached as Exhibit 10.1 and incorporated herein by reference.

Indenture and Notes

The Notes are governed by the Indenture, dated as of June 3, 2013 (the "Indenture") between the Company and The Bank of New York Mellon, as trustee (the "Trustee").

The Notes pay interest semi-annually on June 15 and December 15, commencing on December 15, 2013, at a rate of 2.25% per year, and mature on June 15, 2018, unless earlier converted or purchased by the Company. The Notes are the Company's general unsecured obligations that rank senior in right of payment to any of the Company's future indebtedness that is expressly subordinated in right of payment to the Notes, rank equally in right of payment with the


Company's future unsecured indebtedness that is not so subordinated, effectively junior to any of the Company's future secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including borrowings under Holdings' revolving credit facility trade payables) of the Company's subsidiaries.

At any time prior to 5:00 p.m., New York City time, on the business day immediately preceding March 15, 2018, the Notes will be convertible at the option of the holder only upon the specified events and during the specified periods set forth in the following paragraph. Thereafter, the Notes will be convertible at the option of the holder at any time until 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date. The Notes will initially be convertible at a conversion rate of 53.2992 shares of the Class A common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $18.76. The conversion rate is subject to adjustment upon certain events. Upon conversion, the Company's conversion obligation will be satisfied in cash and, if applicable, shares of Class A common stock (subject to the Company's right to deliver cash in lieu of all or a portion of such shares, based upon a Daily Conversion Value (as defined in the Indenture) calculated for each VWAP Trading Day (as defined in the Indenture) in the applicable 40 VWAP Trading Day Observation Period (as defined in the Indenture).

Prior to 5:00 p.m., New York City time, on the business day immediately preceding March 15, 2018, the Notes will be convertible at the option of the . . .



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 in connection with the Notes and Indenture is incorporated by reference into this Item 2.03.



Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 in connection with the Notes and Indenture and Warrant Transactions is incorporated by reference into this Item 3.02.



Item 8.01 Other Information.

On May 30, 2013, the Company issued a press release announcing the exercise in full of the over-allotment option granted to the Initial Purchasers. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.




Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 4.1    Indenture, dated June 3, 2013, between the Company and The Bank of New
        York Mellon, as trustee.

 4.2    Form of 2.25% Convertible Senior Note due 2018 (included as Exhibit A in
        Exhibit 4.1).

10.1    Purchase Agreement, dated May 28, 2013, between the Company and Credit
        Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith
        Incorporated, as representatives of the several purchasers named therein.

10.2    Form of Convertible Bond Hedge Transaction Confirmation, dated May 28,
        2013, between the Company and dealer.

10.3    Form of Amendment to Convertible Bond Hedge Transaction Confirmation,
        dated May 30, 2013, between the Company and dealer.

10.4    Form of Issuer Warrant Transaction Confirmation, dated May 28, 2013,
        between the Company and dealer.

10.5    Form of Amendment to Issuer Warrant Transaction Confirmation, dated May
        30, 2013, between the Company and dealer.

99.1    Press release, dated May 30, 2013, announcing the exercise in full of the
        Initial Purchasers' over-allotment option.


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