MF GLOBAL (MF, Financial) filed Quarterly Report for the period ended 2010-06-30.
Mf Global has a market cap of $1.08 billion; its shares were traded at around $7.3 with and P/S ratio of 0.4. MF is in the portfolios of RS Investment Management, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.
At March 31, 2010, we had a $1,500.0 million five-year unsecured committed revolving credit facility (the liquidity facility) with a syndicate of banks. On June 29, 2010, we amended our liquidity facility to (i) permit us, in addition to certain of our subsidiaries, to borrow funds under the liquidity facility and (ii) extend the lending commitments of certain of the lenders by two years, from June 15, 2012 to June 15, 2014. Aggregate commitments under the amended liquidity facility are $1,200.9 million of which $689.6 million is available to us for borrowing until July 15, 2014 and $511.3 million is available for borrowing until June 15, 2012 and. As of June 30 and March 31, 2010, $442.5 million was outstanding under the liquidity facility with the remainder available to us. We have classified the $442.5 million of outstanding loans at June 30, 2010 under the liquidity facility as short term debt and as part of our capital structure. In connection with the amendment, we paid a one-time fee of $6.8 million. See Note 8 to our unaudited consolidated financial statements for further details.
Revenues, net of interest and transaction-based expenses, increased $17.9 million, or 6.6%, to $289.4 million for the three months ended June 30, 2010 from $271.5 million for the three months ended June 30, 2009. The increase in revenues, net of interest and transaction based expenses, was due in part to an additional $12.9 million of net revenues generated from client funds and $9.4 million additional net revenues from increased volatility and bid-ask spreads in the commodities and foreign exchange markets and partially offset by the widening of short-term credit spreads in fixed income which decreased net revenues by $9.0 million. The increase was also due to a 22.1% increase in our total volumes of executed and/or cleared exchange-traded futures and options transactions from 429.7 million contracts for the three months ended June 30, 2009 to 524.7 million contracts for the three months ended June 30, 2010. The increase of 95.0 million contracts in our total volumes of executed and/or cleared exchange-traded futures and options transactions was spread across many of our primary products, markets and geographic regions, increasing net revenues by $4.7 million.
Our other expenses, which refer to our expenses other than interest and transaction-based expenses, decreased $26.4 million, or 9.1%, to $265.3 million for the three months ended June 30, 2010 from $291.7 million for the three months ended June 30, 2009. The decrease was primarily due to a reduction in general and other expenses of $19.0 million, driven by a $16.0 million decrease in foreign exchange transaction losses. The decrease in our other expenses was also attributed to a reduction of $16.2 million in employee compensation and benefits (excluding non-recurring IPO awards) which corresponds with our restructuring plan and a change in our compensation structure, a reduction of $3.1 million in depreciation and amortization, a reduction of $2.8 million in professional fees, a reduction of $0.9 million related to lower IPO-related costs and a reduction of $0.2 million of stock-based compensation expense on our equity awards issued in connection with the completion of our initial public offering (IPO). These reductions for the three months ended June 30, 2010 were partially offset by an increase of $9.9 million related to restructuring charges, an increase of $4.2 million in communications and technology costs, an increase of $1.4 million in occupancy and equipment costs and an increase in impairment of goodwill of $0.3 million.
financing transactions, which is how management views the business, principal transactions revenues decreased $2.7 million, or 3.1%, from $87.0 million to $84.3 million for the three months ended June 30, 2009 and 2010, respectively. The decrease in principal transactions was attributable to a reduction in fixed income and stock borrowing and lending revenue which decreased from $48.2 million to $39.2 million for the three months ended June 30, 2009 and 2010, respectively, offset by increased revenues earned in foreign exchange, equities and commodities markets which increased from $38.8 million to $48.2 million for the three months ended June 30, 2009 and 2010, respectively. Principal transactions also reflect dividends earned and paid on equity positions we held as hedges to equity futures contracts purchased from customers through a central clearing counterparty. See Supplementary Data for further information on principal transactions revenues.
Interest income, net, decreased $3.3 million, or 4.6%, to $68.8 million for the three months ended June 30, 2010 from $72.1 million for the three months ended June 30, 2009. This decrease was primarily due to a reduction of $19.3 million in net interest generated from principal transactions and related financing transactions partially offset by an increase of $16.0 million in net interest generated from client payables and excess cash. Net interest generated from principal transactions and related financing transactions decreased from $37.3 million for the three months ended June 30, 2009 to $18.0 million for the three months ended June 30, 2010, driven by slowing customer activity reducing net interest earned by our fixed income products, consisting of both repurchase and resale transactions and stock borrowing and lending activities. This decrease was partially offset by an increase in our net interest generated from client payables and excess cash which increased from $34.8 million to $50.8 million for the three months ended June 30, 2009 and 2010, respectively. See Supplementary Data for further information on the components of net interest income.
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Mf Global has a market cap of $1.08 billion; its shares were traded at around $7.3 with and P/S ratio of 0.4. MF is in the portfolios of RS Investment Management, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
On July 15, 2010, we completed our offer to exchange shares of our common stock, par value $1.00 per share (Common Stock) and a cash premium for any and all of our outstanding 9.00% Convertible Senior Notes due 2038 (the Convertible Notes) and 9.75% Non-Cumulative Convertible Preferred Stock, Series B (the Series B Preferred Stock). As of the expiration of the exchange offer, 1.1 million shares of Series B Preferred Stock were validly tendered and we issued 10.5 million shares Common Stock, paid a cash premium of $48.8 million and paid accrued but unpaid dividends of $1.8 million. In addition, $9.3 million in aggregate principal amount of the Convertible Notes were validly tendered and we issued 0.9 million shares Common Stock, paid a cash premium of $4.5 million and paid accrued but unpaid interest of $0.1 million. After settlement, $195.7 million in aggregate principal amount of Convertible Notes and 0.4 million shares of Series B Preferred Stock remain outstanding. See Note 18 to our unaudited consolidated financial statements for further details.At March 31, 2010, we had a $1,500.0 million five-year unsecured committed revolving credit facility (the liquidity facility) with a syndicate of banks. On June 29, 2010, we amended our liquidity facility to (i) permit us, in addition to certain of our subsidiaries, to borrow funds under the liquidity facility and (ii) extend the lending commitments of certain of the lenders by two years, from June 15, 2012 to June 15, 2014. Aggregate commitments under the amended liquidity facility are $1,200.9 million of which $689.6 million is available to us for borrowing until July 15, 2014 and $511.3 million is available for borrowing until June 15, 2012 and. As of June 30 and March 31, 2010, $442.5 million was outstanding under the liquidity facility with the remainder available to us. We have classified the $442.5 million of outstanding loans at June 30, 2010 under the liquidity facility as short term debt and as part of our capital structure. In connection with the amendment, we paid a one-time fee of $6.8 million. See Note 8 to our unaudited consolidated financial statements for further details.
Revenues, net of interest and transaction-based expenses, increased $17.9 million, or 6.6%, to $289.4 million for the three months ended June 30, 2010 from $271.5 million for the three months ended June 30, 2009. The increase in revenues, net of interest and transaction based expenses, was due in part to an additional $12.9 million of net revenues generated from client funds and $9.4 million additional net revenues from increased volatility and bid-ask spreads in the commodities and foreign exchange markets and partially offset by the widening of short-term credit spreads in fixed income which decreased net revenues by $9.0 million. The increase was also due to a 22.1% increase in our total volumes of executed and/or cleared exchange-traded futures and options transactions from 429.7 million contracts for the three months ended June 30, 2009 to 524.7 million contracts for the three months ended June 30, 2010. The increase of 95.0 million contracts in our total volumes of executed and/or cleared exchange-traded futures and options transactions was spread across many of our primary products, markets and geographic regions, increasing net revenues by $4.7 million.
Our other expenses, which refer to our expenses other than interest and transaction-based expenses, decreased $26.4 million, or 9.1%, to $265.3 million for the three months ended June 30, 2010 from $291.7 million for the three months ended June 30, 2009. The decrease was primarily due to a reduction in general and other expenses of $19.0 million, driven by a $16.0 million decrease in foreign exchange transaction losses. The decrease in our other expenses was also attributed to a reduction of $16.2 million in employee compensation and benefits (excluding non-recurring IPO awards) which corresponds with our restructuring plan and a change in our compensation structure, a reduction of $3.1 million in depreciation and amortization, a reduction of $2.8 million in professional fees, a reduction of $0.9 million related to lower IPO-related costs and a reduction of $0.2 million of stock-based compensation expense on our equity awards issued in connection with the completion of our initial public offering (IPO). These reductions for the three months ended June 30, 2010 were partially offset by an increase of $9.9 million related to restructuring charges, an increase of $4.2 million in communications and technology costs, an increase of $1.4 million in occupancy and equipment costs and an increase in impairment of goodwill of $0.3 million.
financing transactions, which is how management views the business, principal transactions revenues decreased $2.7 million, or 3.1%, from $87.0 million to $84.3 million for the three months ended June 30, 2009 and 2010, respectively. The decrease in principal transactions was attributable to a reduction in fixed income and stock borrowing and lending revenue which decreased from $48.2 million to $39.2 million for the three months ended June 30, 2009 and 2010, respectively, offset by increased revenues earned in foreign exchange, equities and commodities markets which increased from $38.8 million to $48.2 million for the three months ended June 30, 2009 and 2010, respectively. Principal transactions also reflect dividends earned and paid on equity positions we held as hedges to equity futures contracts purchased from customers through a central clearing counterparty. See Supplementary Data for further information on principal transactions revenues.
Interest income, net, decreased $3.3 million, or 4.6%, to $68.8 million for the three months ended June 30, 2010 from $72.1 million for the three months ended June 30, 2009. This decrease was primarily due to a reduction of $19.3 million in net interest generated from principal transactions and related financing transactions partially offset by an increase of $16.0 million in net interest generated from client payables and excess cash. Net interest generated from principal transactions and related financing transactions decreased from $37.3 million for the three months ended June 30, 2009 to $18.0 million for the three months ended June 30, 2010, driven by slowing customer activity reducing net interest earned by our fixed income products, consisting of both repurchase and resale transactions and stock borrowing and lending activities. This decrease was partially offset by an increase in our net interest generated from client payables and excess cash which increased from $34.8 million to $50.8 million for the three months ended June 30, 2009 and 2010, respectively. See Supplementary Data for further information on the components of net interest income.
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