Robinhood Securities to access a revolving credit facility of $2.175B
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Robinhood Securities, one of the most popular retail trading platforms, has amended its credit agreement with a bank syndicate. It marks the second time that the California-based brokerage platform is amending the credit agreement.
Robinhood Securities amends the credit facility
Robinhood Securities has again changed its credit agreement with a bank syndicate spearheaded by JPMorgan Chase. The brokerage platform now has access to a revolving credit facility with a total commitment of $2.175 billion.
The amendment comes after changes to the $2.275 billion credit facility that Robinhood had signed in April 2022. The brokerage platform signed the second amendment agreement on March 24, 2023, per Form 8-K filed with the US Securities and Exchange Commission (SEC).
The broker said that under the newly signed agreement, it would be subject to several requirements. The filing mentions limits to metrics such as net worth, net capital as a requirement of the credit agreement.
“The Credit Agreement requires RHS to maintain a minimum consolidate tangible net worth and a minimum excess net capital, and subjects RHS to a specified limit on minimum net capital to aggregate debit items,” the filing said.
The filing, which the Chief Financial Officer signed at Robinhood Markets Jason Warnick, also adds that as of March 24, zero borrowings were outstanding under the changed agreement. Therefore, a total of $2.175 billion was still available to the trading platform.
Robinhood Securities first secured a deal for the 364-day senior secured revolving credit facility for $2.18 billion. The deal was secured in April last year. On April 11, 2022, the facility was amended again to $2.275 billion, and the figure has now been amended again to $2.175 billion.
Robinhood’s financial results and growth plans
Robinhood recently shared its operating data for the first month of 2023. Robinhood Markets reported a 31% year-over-year drop in monthly active users during the period. During the month, the number of users on the trading platform declined from 17.3 million to 12 million.
On the other hand, the total number of users on the platform increased by 600,000 month-over-month. The figure rose from the 11.4 million reported during the previous month. The financial results come as Robinhood is struggling to expand its operations.
The platform recently announced that it would not expand to the United Kingdom following the acquisition of Ziglu. The latter is a cryptocurrency trading platform Robinhood announced plans to acquire in April last year.
During the acquisition talks, Robinhood made significant efforts to trim the acquisition price by 57% from $170 million to $72.5 million because of market conditions. The platform halted this deal last month.
Robinhood is also facing scrutiny from regulators because of its crypto trading business. Last month, the brokerage platform disclosed that it obtained an investigative subpoena from the SEC enquiring about the process of listing new cryptocurrencies on its platform.
