Company Takes Minority Stake in a New Real Estate Finance
and Investment Business
BGC Also Closes Debt Financing of $975 Million
NEW YORK, Sept. 8, 2017 /PRNewswire/ -- BGC Partners,
Inc. (NASDAQ: BGCP) ("BGC Partners", "BGC", or the "Company"), a
leading global brokerage company servicing the financial and real
estate markets, announced today that it has completed the
previously announced acquisition of Berkeley Point Financial
LLC1 for $875 million.
Management Comments
Howard W.
Lutnick, Chairman and Chief Executive Officer of BGC
Partners, said: "We believe that the addition of Berkeley Point
will dramatically increase the scale and scope of
Newmark.2 We expect the combination of Berkeley Point, a
top five GSE multifamily lender, ARA, our top three multifamily
capital markets business, and our fast-growing commercial mortgage
brokerage business to generate substantial revenue synergies across
our businesses.
"We are also pleased to announce our new Credit Agreements. With
broad-based support from leading banks, we have financed this
transaction, as well as significantly increased BGC's revolver
capacity going forward."
Minority Investment in New Real Estate Finance and Investment
Business
BGC has also completed the previously announced
investment of $100 million in cash
for approximately 27 percent of the capital (the "Company
Investment") in a commercial real estate-related finance and
investment business along with Cantor Fitzgerald, L.P.3
The Berkeley Point acquisition and the Company Investment
(together, the "Transactions") are expected to be immediately
accretive to the Company's earnings per share.
Berkeley Point and the Company Investment will be part of BGC's
Real Estate Services segment.
Credit Agreements
In connection with the
Transactions, the Company has entered into two credit agreements
(the "Credit Agreements") with participating financial
institutions. The first Credit Agreement makes available to BGC a
$400 million two-year unsecured
senior revolving credit facility (the "Revolving Credit Facility").
The second Credit Agreement provides for a $575 million unsecured senior term loan (the
"Term Loan Facility") maturing on the second anniversary of the BPF
acquisition closing date. The interest rates of the Credit
Agreements are LIBOR plus 225 basis points, subject to adjustments
based on pricing grids dependent on the Company's credit ratings
with Standard & Poor's and Fitch. The Credit Agreements also
contain certain other customary financial covenants.
On September 8, 2017, the Company
drew $400 million under the Revolving
Credit Facility and $575 million
under the Term Loan Facility (together, the "Borrowing"). BGC
utilized the funds, together with cash on hand, to finance the
Transactions, and to pay expenses related to the Transactions and
the financing. A portion of the Borrowing was also used to repay in
full the outstanding balance of $150
million under the Company's previously existing revolving
credit agreement, dated as of February 25,
2016. BGC expects to repay the Borrowing from future
financing arrangements, existing financing sources, cash on hand,
and/or future equity issuances. The Term Loan Facility is also
subject to mandatory prepayment, with 100% of net cash proceeds of
all material asset sales and debt and equity issuances, subject to
certain customary exceptions.
Bank of America Merrill Lynch acted as the left side joint lead
arranger, joint bookrunner and administrative agent for the Credit
Agreements. Banks acting as joint lead arrangers, joint
bookrunners, and syndication agents are: Goldman Sachs Bank
USA; Citigroup Global Markets
Inc.; Capital One, N.A.; and PNC Bank, N.A. Additional banks
participating in the Credit Agreements are: Mizuho Bank, Ltd. (also a syndication agent);
Industrial and Commercial Bank of China Ltd. (also the
documentation agent); Stifel Bank & Trust; BMO Harris Bank
N.A.; Regions Bank; Associated Bank, N.A.; and BankUnited, N.A.
Additional Information
See the Company's press
release and investor presentation, both dated July 18, 2017, as well as BGC's Current Report on
Form 8-K filed with the Securities and Exchange Commission (the
"SEC") on July 21, 2017 for
previously disclosed information about the Transactions. Additional
information about the Transactions and the Credit Agreements will
be included in SEC filings expected to be made by BGC in the next
few days. All of this information will be available at
ir.bgcpartners.com.
Sandler O'Neill & Partners, L.P. served as financial advisor
to the Special Committee of the Board of Directors of BGC
(consisting of all four of BGC's independent directors) in
connection with the Transactions, and Debevoise & Plimpton LLP
served as legal advisor to the Special Committee. Cantor Fitzgerald
& Co. served as Cantor's financial advisor in connection with
the Transactions, and Wachtell, Lipton, Rosen & Katz served as
Cantor's legal advisor.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
Discussion of Forward-Looking Statements
Statements
contained or incorporated by reference herein regarding BGC,
Berkeley Point, the Real Estate LP, the Berkeley Point acquisition,
the Company Investment, the Credit Agreements or the Borrowing that
are not historical facts are "forward-looking statements" that
involve risks and uncertainties, which could cause actual results
to differ from those contained in the forward-looking statements.
Factors that could cause actual results to differ from those
contained in the forward-looking statements include, but are not
limited to: the possibility that there may be an adverse effect or
disruption from the Berkeley Point acquisition, the Company
Investment, the Credit Agreements or the Borrowing that negatively
impacts BGC's businesses; the possibility that the anticipated
benefits of the Transactions to BGC may not be realized as
presently contemplated or at all; and the possibility that changes
in interest rates, commercial real estate values, the regulatory
environment, the effects of weather events or natural disasters,
pricing or other competitive pressures, and other market conditions
or factors could cause the results of BGC or Berkeley Point to
differ from the forward-looking statements contained or
incorporated by reference herein. For a discussion of
additional risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see BGC's SEC filings, including, but not limited to,
the risk factors set forth in the most recent Form 10-K and any
updates to such risk factors contained in subsequent Forms 10-Q or
Forms 8-K. Except as required by law, BGC undertakes no
obligation to update any forward-looking statements.
About BGC Partners, Inc.
BGC Partners is a leading
global brokerage company servicing the financial and real estate
markets. BGC owns GFI Group Inc., a leading intermediary and
provider of trading technologies and support services to the global
OTC and listed markets. The Company's Financial Services offerings
include fixed income securities, interest rate swaps, foreign
exchange, equities, equity derivatives, credit derivatives,
commodities, futures, insurance brokerage, and structured products.
BGC provides a wide range of services, including trade execution,
broker-dealer services, clearing, trade compression, post trade,
information, and other services to a broad range of financial and
non-financial institutions. Through brands including FENICS, BGC
Trader, Capitalab, Lucera, and FENICS Market Data, BGC offers
financial technology solutions, market data, and analytics related
to numerous financial instruments and markets.
Real Estate Services are offered through brands including
Newmark Knight Frank, Newmark Cornish & Carey, Berkeley Point,
ARA, Computerized Facility Integration, Newmark Knight Frank
Valuation & Advisory, and Excess Space. Under these names and
others, the Company provides a wide range of commercial real estate
services, including leasing and corporate advisory, investment
sales and financial services, consulting, project and development
management, property and facilities management, the origination and
sale of multifamily loans through government-sponsored and
government-funded loan programs, as well as the servicing of
commercial real estate loans, including those it originates.
BGC's customers include many of the world's largest banks,
broker-dealers, investment banks, trading firms, hedge funds,
governments, corporations, property owners, real estate developers,
and investment firms. BGC's common stock trades on the NASDAQ
Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC
also has an outstanding bond issuance of Senior Notes due
June 15, 2042, which trade on the New
York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is
led by Chairman and Chief Executive Officer Howard W. Lutnick. For
more information, please visit http://www.bgcpartners.com. You can
also follow the Company at https://twitter.com/bgcpartners and/or
https://www.linkedin.com/company/bgc-partners.
BGC, BGC Trader, GFI, FENICS, FENICS.COM, Besso, Sunrise,
Capitalab, Swaptioniser, ColleX, Newmark, Grubb & Ellis,
Berkeley Point, ARA, Computerized Facility Integration, Landauer,
Lucera, Excess Space, Excess Space Retail Services, Inc., and Grubb
are trademarks/service marks, and/or registered trademarks/service
marks and/or service marks of BGC Partners, Inc. and/or its
affiliates. Knight Frank is a service mark of Knight Frank
(Nominees) Limited.
1 The acquisition of Berkeley Point Financial LLC
includes its wholly owned subsidiary Berkeley Point Capital LLC,
which together may be referred to as "Berkeley Point" or "BPF".
2 "Newmark" may be used interchangeably with
"Newmark Knight Frank", "NKF", and
the Company's "Real Estate Services" business or segment.
3 Cantor Fitzgerald, L.P. and/or certain of its
affiliates or subsidiaries are collectively referred to as
"Cantor", while the commercial real estate-related finance and
investment business may be referred to as the "Real Estate LP".
Photo:
http://mma.prnewswire.com/media/553681/Berkeley_Point_Logo.jpg
Logo:
http://mma.prnewswire.com/media/136112/bgc_partners_inc_logo.jpg