Virtu Financial Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation
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CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement |
Amendment to Credit Agreement
On February 19, 2025 (the “Amendment Effective Date”), Virtu Financial LLC (“Holdings”), VFH Parent LLC (the “Borrower”) and certain subsidiaries of the Borrower entered into Amendment No. 2 (“Amendment No. 2”), which amended the Credit Agreement, dated as of January 13, 2022 (as amended by Amendment No. 1, dated as of June 21, 2024, the “Existing Credit Agreement”, and as amended by Amendment No. 2, the “Amended Credit Agreement”), by and among Holdings, the Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.
Amendment No. 2 amends the Existing Credit Agreement to, among other things, effect a repricing of the $1,245 million in aggregate principal amount of senior secured first lien term B-1 loans due 2031 outstanding under the Existing Credit Agreement (the “Existing Term Loans”) by establishing a new refinancing tranche of $1,245 million in aggregate principal amount of senior secured first lien term B-2 loans (the “New Term Loans”), the proceeds of which were used to repay in full the Existing Term Loans on the Amendment Effective Date.
The New Term Loans bear interest, at our election, at either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) term SOFR for a borrowing with an interest period of one month plus 1.0% and (d) 1.0%, plus, in each case, 1.50%, or (ii) the greater of (x) term SOFR for the interest period in effect and (y) 0%, plus, in each case, 2.50%.
The New Term Loans will mature on June 21, 2031 and amortize in annual installments equal to 1.0% of the original aggregate principal amount of the New Term Loans due on each anniversary of the Amendment Effective Date. The New Term Loans are also subject to contingent principal payments based on excess cash flow and certain other triggering events.
The above description of the terms of Amendment No. 2 is qualified in its entirety by reference to the full text of Amendment No. 2, which will be filed with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
| 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 under Item 1.01 above is hereby incorporated by reference in its entirety in response to this Item.
Cautionary Note Regarding Forward-Looking Statements
This report may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding Virtu’s business that are not historical facts are forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, and if the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. Forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties, some or all of which are not predictable or within Virtu’s control, that could cause actual performance or results to differ materially from those expressed in the statements. Those risks and uncertainties include, without limitation: risks relating to fluctuations in trading volume and volatilities in the markets in which we operate; the ability of our trading counterparties, clients, and various clearing houses to perform their obligations to us; the performance and reliability of our customized trading platform; the risk of material trading losses from our market making activities; swings in valuations in securities or other instruments in which we hold positions; increasing competition and consolidation in our industry; the risk that cash flow from our operations and other available sources of liquidity will not be sufficient to fund our various ongoing obligations, including operating expenses, short-term funding requirements, margin requirements, capital expenditures, debt service and dividend payments; potential consequences of pending SEC proposals by the prior administration focused on equity markets which may, if adopted, result in reduced overall and off-exchange trading volumes and market making opportunities, impose additional or heightened regulatory obligations on market makers and other market participants, and generally increase the implicit and explicit cost as well as the complexity of the U.S. equities eco-system for all participants; regulatory and legal uncertainties and potential changes associated with our industry, particularly in light of increased attention from media, regulators and lawmakers to market structure and related issues including but not limited to the retail trading environment, wholesale market making and off exchange trading more generally and payment for order flow arrangements; potential adverse results from legal or regulatory proceedings; our ability to remain technologically competitive and to ensure that the technology we utilize is not vulnerable to security risks, hacking and cyber-attacks; risks associated with third party software and technology infrastructure. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in forward-looking statements, see Virtu’s Securities and Exchange Commission filings, including but not limited to Virtu’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| VIRTU FINANCIAL, INC. | ||||
| By: | /s/ Justin Waldie | |||
| Name: | Justin Waldie | |||
| Title: | Senior Vice President, Secretary and General Counsel | |||
Dated: February 19, 2025