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Siebert Financial Corp. (NASDAQ:SIEB), a firm operating in the securities brokerage industry, has entered into a significant financial agreement. On Monday, the company's fully owned subsidiary, Muriel Siebert & Co., LLC, finalized a credit agreement with BMO Bank N.A. for a revolving credit facility of up to $20 million.
The new credit line is intended to support the company's financing of NSCC Deposit Requirements and Reserve Account withdrawals. In conjunction with this agreement, Siebert Financial has also provided a Parent Guaranty to ensure repayment of any debts incurred by the subsidiary. The company maintains a healthy current ratio of 1.13, indicating adequate liquidity to meet its short-term obligations.
The terms of the credit agreement specify an interest rate on borrowings at 2.5% plus the greater of Term SOFR plus 0.11448%, the Federal Funds Target (NYSE:TGT) Range – Upper Limit, or a minimum of 0.25%. Additionally, the company will be charged an annual commitment fee of 0.50% on the unused portion of the commitment.
Siebert Financial must adhere to several financial covenants as part of the agreement. These include maintaining a minimum total regulatory capital of $45 million, excess net capital of $20 million, an assets to total regulatory capital ratio not exceeding 5 to 1, and a minimum liquidity ratio of at least 1.0.
The legal opinion required as a precondition for the credit line was delivered to the lender on December 18, 2024, marking the completion of the necessary formalities.
This strategic financial maneuver is set to provide Siebert Financial with enhanced liquidity and financial flexibility. The company has shown robust performance with 27.8% revenue growth in the last twelve months, and InvestingPro analysis reveals several additional positive indicators.
In other recent news, Siebert Financial Corp. has announced several key developments. The company's Q3 earnings and revenue results were positively received by investors. Additionally, Siebert Financial Corp. has secured a $20 million revolving credit facility with East West Bank, a strategic move to facilitate acquisitions, stock buybacks, and general corporate needs.
The company has expanded its operations into the entertainment and media sectors through the acquisition of Gebbia Entertainment LLC. This acquisition includes a business partnership with GAMMA Media and L.A. Reid LLC, as well as rights to The Siemens (ETR:SIEGn), a musical group managed by Akon.
In terms of leadership, Raakhee Miller has been appointed as President of Siebert Technologies, LLC, a move expected to enhance the firm's digital platforms. Furthermore, all nominated directors were elected to serve until the 2025 annual meeting, reflecting strong shareholder support.
On the analyst front, Crowe LLP has been ratified as the company's independent registered public accounting firm for the fiscal year 2024, after the resignation of the former auditor, Baker Tilly US, LLP.
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