BGC Partners has entered into an unsecured credit agreement with a group of major bank lenders that provides up to $200 million in revolving loans.
The broker entered into a committed agreement with Bank of America, Capital One, the New York Branch of the Industrial and Commercial Bank of China Limited, U.S. Bank, and others, while several of the company’s domestic non-regulated subsidiaries are parties to the agreement as guarantors.
The agreement provides the option to increase the aggregate loans from an initial $150 million to $200 million. The borrowings will bear interest at either LIBOR or a base rate plus an additional margin ranging from 50 to 250 basis points. The facility matures on February 25, 2018.
Howard Lutnick, chairman and CEO of BGC, said in a prepared statement that the new credit agreement further enhances the company’s operating flexibility and that the company expects to receive over $760 million in additional Nasdaq stock over time.
“The agreement, along with our liquidity position, and the expected receipt of 11.9 million Nasdaq shares, means that we have over $1.9 billion of dry powder available to us to drive substantial returns for our investors,” said Lutnick.
Lutnick added that the company also expects to use its considerable financial resources for hiring, acquisitions, dividends, repurchasing shares and units of BGC, and repaying debt, while maintaining or improving its investment grade rating.
Along with the closing of this agreement, BGC terminated the $25 million unsecured credit agreement the company entered into on December 24, 2015 with Bank of America. As of February 25, 2016, there were no borrowings outstanding under either the $150 million facility or the terminated $25 million facility.
BGC Partners is a global brokerage company in New York servicing the financial and real estate markets.