Penson - What's this all about?

J

jackpearson

Item 1.01 Entry into a Material Definitive Agreement.
On May 15, 2012, Penson Worldwide, Inc. (the “Company”) reached an agreement with Financial Industry Regulatory Authority (“FINRA”) regarding the Company’s request to withdraw regulatory capital via an intercompany loan between the Company and Penson Financial Services, Inc. (“PFSI”), the Company’s U.S. broker-dealer subsidiary. Under the agreement, FINRA granted permission for an intercompany loan of $5.5 million from PFSI to the Company, which was used to pay interest on the Company’s outstanding 12.50% Senior Second Lien Secured Notes due 2017 (“Senior Second Lien Notes”). The Company agreed to continue its efforts to complete strategic transactions, which would include PFSI’s securities and futures clearing businesses. As previously announced, the Company is actively engaged in advanced discussions regarding strategic transactions.

http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=8281087

there's more at that link.
 
Quote from jackpearson:

Item 1.01 Entry into a Material Definitive Agreement.
On May 15, 2012, Penson Worldwide, Inc. (the “Company”) reached an agreement with Financial Industry Regulatory Authority (“FINRA”) regarding the Company’s request to withdraw regulatory capital via an intercompany loan between the Company and Penson Financial Services, Inc. (“PFSI”), the Company’s U.S. broker-dealer subsidiary. Under the agreement, FINRA granted permission for an intercompany loan of $5.5 million from PFSI to the Company, which was used to pay interest on the Company’s outstanding 12.50% Senior Second Lien Secured Notes due 2017 (“Senior Second Lien Notes”). The Company agreed to continue its efforts to complete strategic transactions, which would include PFSI’s securities and futures clearing businesses. As previously announced, the Company is actively engaged in advanced discussions regarding strategic transactions.

http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=8281087

there's more at that link.
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What it means is that the broker, Penson Financial and Penson Futures has more cash than they need. The holding company that is represented by the stock, is having problems and has been looking for a strategic partner or an debt to equity swap. The debt to equity swap was scheduled to close before that last debt payment last Monday. It did not . So to avoid missing a debt payment, FINRA allowed this.

The broker continues to have excess capital and the holding company continues to look for a solutions for their high interest debt mostly owed to Broadridge Financial, from the sale of Ridge Clearing to Penson last year.
 
Quote from jackpearson:

when is the next debt payment due?
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I don't know. I only know about the other one from the debt to equity notice back in March, with a May closing date.
 
Quote from rmorse:

What it means is that the broker, Penson Financial and Penson Futures has more cash than they need. The holding company that is represented by the stock, is having problems and has been looking for a strategic partner or an debt to equity swap. The debt to equity swap was scheduled to close before that last debt payment last Monday. It did not . So to avoid missing a debt payment, FINRA allowed this.

The broker continues to have excess capital and the holding company continues to look for a solutions for their high interest debt mostly owed to Broadridge Financial, from the sale of Ridge Clearing to Penson last year.
More...

What a load of hogwash.

The only reason that the Broker Dealer Penson Financial Services has any capital is because the parent company Penson Worldwide has $280 million in debt. The parent company is now broke and has no resources to service the debt.

In late April the Penson Worldwide 12.50% Senior Notes maturing 5/15/17 were quoted at a price of 35.5. I would think the price is lower today but can't get quotes on these notes.

The debt is not mostly owed to Broadridge Financial.
 
Quote from jackpearson:

when is the next debt payment due?
More...

Next interest payment is the semiannual $2.4 million coupon payment due June 1, 2012 on the $60 million principal 8.00% Senior Convertible Notes due 2014.

Let's see where they get that payment from.
 
Quote from jeb9999:

Next interest payment is the semiannual $2.4 million coupon payment due June 1, 2012 on the $60 million principal 8.00% Senior Convertible Notes due 2014.

Let's see where they get that payment from.
More...

they're going to print money like the fed:D
 
Some old news from a few months ago:

Retama Race Track in Texas

"Parent company of Retama in trouble again
Call Now's latest action comes as it seeks buyer for local horse track."


Read more: http://www.mysanantonio.com/busines...ma-in-trouble-again-2213627.php#ixzz1vd6e16i6

Call Now has had other recent difficulties. Penson Worldwide Inc., a Dallas company that has provided various loans to Call Now, disclosed this summer it was starting foreclosure proceedings on collateral pledged on the loans. The collateral includes bonds that helped pay for the track's construction.

Read more: http://www.mysanantonio.com/busines...ma-in-trouble-again-2213627.php#ixzz1vd6EGWCH

Stock is down to 36 cents. Nice people worked there, too bad really.

What were they thinking with loaning racetrack's money in the first place. Not sure if that's the cause of all the financial problems, but a portion I guess.

Don
 
Stock hit $.16 today.....that's 16 cents!!!

Expect a run on the bank soon and them shutting down or transferring all their assets to a real clearing firm. Either way, I can't see why people would stay there.
 
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