Credit Facilities (Notes)

9 Months Ended

Jun. 30, 2020

Credit Facilities

Committed Credit Facilities

The Company has four committed credit facilities, including a senior secured term loan, under which the Company and its subsidiaries may borrow up to $739.0 million, subject to the terms and conditions for these facilities. The amounts outstanding under these credit facilities carry variable rates of interest, thus approximating fair value. The Company’s committed credit facilities consist of the following:

•

$379.0 million senior facility available to StoneX Group Inc. for general working capital requirements. During the three months ended December 31, 2019, additional members were added to the lending syndication increasing the committed amount to $393.0 million. The amended facility is comprised of a $196.5 million revolving credit facility and a $196.5 million Term Loan facility. The Company is required to make quarterly principal payments against the Term Loan equal to 1.25% of the original balance with the remaining balance due on the maturity date. Amounts repaid on the Term Loan may not be reborrowed.


•	$75.0 million facility available to the Company’s wholly owned subsidiary, StoneX Financial Inc., for short-term funding of margin to exchange-clearing organizations. The facility is subject to annual review and guaranteed by StoneX Group Inc.


•	$260.0 million facility available to the Company’s wholly owned subsidiary, FCStone Merchant Services, LLC, for financing traditional commodity financing arrangements and commodity repurchase agreements. The facility is guaranteed by StoneX Group Inc.


•	$25.0 million facility available to the Company’s wholly owned subsidiary, StoneX Financial Ltd., for short-term funding of margin to exchange-clearing organizations. The facility is guaranteed by StoneX Group Inc.

Uncommitted Credit Facilities

The Company has a secured, uncommitted loan facility under which StoneX Financial Inc. may borrow up to $75.0 million, collateralized by commodities warehouse receipts, to facilitate U.S. commodity exchange deliveries of its clients, subject to certain terms and conditions of the credit agreement. There were no borrowings outstanding under this credit facility as of June 30, 2020, and September 30, 2019.

The Company has a secured, uncommitted loan facility under which StoneX Financial Inc. may borrow for short-term funding of proprietary and client securities margin requirements, subject to certain terms and conditions of the agreement. The uncommitted amount available to be borrowed is not specified, and all requests for borrowing are subject to the sole discretion of the lender. The borrowings are secured by first liens on Company owned marketable securities or client owned securities which have been pledged to the Company. The amounts borrowed under the facilities are payable on demand. There were $24.4 million and zero in borrowings outstanding under this credit facility as of June 30, 2020, and September 30, 2019, respectively.

The Company has secured, uncommitted loan facilities under which StoneX Financial Inc. may borrow up to $100.0 million for short-term funding of proprietary and client securities margin requirements, subject to certain terms and conditions of the agreement. The borrowings are secured by first liens on Company owned marketable securities or client owned securities which have been pledged to the Company. The amounts borrowed under the facilities are payable on demand. There were no borrowings outstanding under this credit facility as of June 30, 2020 and September 30, 2019.

The Company had a secured, uncommitted loan facility under which FCStone Merchant Services, LLC could borrow up to $20.0 million to facilitate the financing of inventory of commodities and other products or goods approved by the lender in its sole discretion, subject to certain terms and conditions of the loan facility agreement. There were $3.4 million in borrowings outstanding under this credit facility as of September 30, 2019. The credit facility was terminated during the three months ended March 31, 2020, in connection with the refinancing and extension of FCStone Merchant Services, LLC’s committed credit facility.

Senior Secured Notes

On June 11, 2020, the Company completed the issuance and sale of $350 million in aggregate principal amount of the Company’s Notes at the offering price of 98.5% of the aggregate principal amount.

The Company had deposited the gross proceeds from the sale of the Senior Secured Notes into a segregated escrow account until the date that certain escrow release conditions were satisfied. The escrow release conditions included, among other things, the consummation of the merger of the Company’s wholly-owned subsidiary with Gain Capital Holdings Inc. (“Gain”) as further discussed in Note 18. Prior to the satisfaction of the escrow release conditions, the Senior Secured Notes were not guaranteed and were secured by a first-priority security interest in the escrow account. The escrow release conditions were satisfied on July 31, 2020, and the Senior Secured Notes are now fully and unconditionally guaranteed, jointly and severally, on

a senior second lien secured basis, by certain subsidiaries of the Company that guarantee the Company’s senior committed credit facility and by Gain and certain of its domestic subsidiaries.

The Notes will mature on June 15, 2025. Interest on the Senior Secured Notes accrues at a rate of 8.625% per annum and is payable semiannually in arrears on June 15 and December 15 of each year, commencing on December 15, 2020. The Company incurred debt issuance costs of $8.0 million in connection with the issuance of the Senior Secured Notes, which are being amortized over the term of the Senior Secured Notes under the effective interest method.

The Company has the option to redeem all or a portion of the Senior Secured Notes at any time prior to June 15, 2022 at a price equal to 100% of the principal amount of the Senior Secured Notes redeemed plus accrued and unpaid interest to the redemption date plus a “make-whole” premium. At any time on or after June 15, 2022, the Company may redeem the Senior Secured Notes, in whole or in part, at the redemption prices set forth in the indenture. At any time before June 15, 2022, the Company may also redeem up to 40% of the aggregate principal amount of the Senior Secured Notes at a redemption price of 108.625% of the principal amount, plus accrued and unpaid interest, if any, to the date of redemption, with the proceeds of certain equity offerings. In addition, upon the earlier to occur of (x) a business combination between the Company’s subsidiaries that are registered in the UK and regulated by the Financial Conduct Authority and (y) the one year anniversary of the date of issuance of the Senior Secured Notes, the Company may elect to redeem up to $100.0 million in aggregate principal amount of the Senior Secured Notes at a redemption price equal to 103% of the principal amount of the Senior Secured Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption. If the Company elects not to redeem the Senior Secured Notes, the holders of the Senior Secured Notes will have the right to require the Company to repurchase up to $100.0 million in aggregate principal amount of the Senior Secured Notes (or a lesser amount equal to the difference between $100.0 million and the amounts previously redeemed by the Company) at a purchase price equal to 103% of the principal amount of the Senior Secured Notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase. The holders of the Senior Secured Notes also possess mandatory redemption rights in the event that the Gain Notes are not fully redeemed at further discussed in Note 18.

The following table sets forth a listing of credit facilities, the current committed amounts as of the report date on the facilities, and outstanding borrowings on the facilities as well as indebtedness on a promissory note and the Senior Secured Notes as of the periods indicated:



(in millions)
						Amounts Outstanding
	Borrower	Security	Renewal/Expiration Date	Total Commitment		June 30, 2020			September 30, 2019
Committed Credit Facilities
	Term Loan	(1)	February 22, 2022	$	182.5	$	182.0	(3)	$	167.6
	Revolving Line of Credit	(1)	February 22, 2022	196.5		127.0			70.0
	Senior StoneX Group Inc. Committed Credit Facility			379.0		309.0			237.6
	StoneX Financial Inc.	None	April 2, 2021	75.0		—			—
	FCStone Merchants Services, LLC	Certain commodities assets	January 29, 2022	260.0		162.4			128.5
	StoneX Financial Ltd.	None	September 14, 2020	25.0		—			—
				$	739.0	$	471.4		$	366.1

Uncommitted Credit Facilities
	StoneX Financial Inc.	Commodities warehouse receipts and certain pledged securities	n/a	n/a		24.4			—
	FCStone Merchant Services, LLC	Certain commodities assets	n/a	n/a		—			3.4

	StoneX Group Inc.
	Note Payable to Bank	Certain equipment				—			0.4
	Senior Secured Notes	(2)				336.9		(3)	—

Total outstanding borrowings						$	832.7		$	369.9

(1) The StoneX Group Inc. senior committed credit facility is secured by substantially all of the assets of the Company and certain subsidiaries identified in the credit facility agreement as obligors, and pledged equity of certain subsidiaries identified in the credit facility as limited guarantors.

(2) The Notes and the related guarantees are secured by liens on substantially all of the Company’s and the guarantors’ assets, subject to certain customary and other exceptions and permitted liens. The liens on the assets that secure the Senior Secured Notes and the related guarantees are contractually subordinated to the liens on the assets that secure the Company’s and the guarantors’ existing and future first lien secured indebtedness, including indebtedness under the Company’s senior committed credit facility.

(3) Amounts outstanding under the Term Loan and the Senior Secured Notes is reported net of unamortized deferred financing costs and original issue discount of $0.6 million and $13.1 million, respectively.

As reflected above, $100.0 million of the Company’s committed credit facilities are scheduled to expire within twelve months of this filing. The Company intends to renew or replace the facilities when they expire, and based on the Company’s liquidity position and capital structure, the Company believes it will be able to do so.

The Company’s credit facility agreements contain financial covenants relating to financial measures on a consolidated basis, as well as on a certain stand-alone subsidiary basis, including minimum tangible net worth, minimum regulatory capital, minimum net unencumbered liquid assets, maximum net loss, minimum fixed charge coverage ratio and maximum funded debt to net worth ratio. Failure to comply with these covenants could result in the debt becoming payable on demand. As of June 30, 2020, the Company was in compliance with all of its financial covenants under its credit facilities.