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Newmark and BGC Partners monetizing two million Nasdaq shares.

Newmark (NMRK) and parent company BGC Partners (BGCP) announced that Newmark entered into transactions related to the monetization of the shares of Nasdaq it expects to receive in 2019 and 2020. On June 18, Newmark's principal operating subsidiary issued approximately $175M of exchangeable preferred limited partnership units in a private transaction to The Royal Bank of Canada. Contemporaneously with the issuance of these EPUs, a newly formed special purpose vehicle entered into two variable postpaid forward transactions with RBC. The SPV is an indirect subsidiary of Newmark whose sole asset is the Nasdaq share earn-outs for 2019 and 2020. RBC has rights to receive up to 992,247 shares of Nasdaq common stock in 4Q19 and 4Q20. Net of transaction costs, Newmark will receive approximately $153M of net proceeds and non-dilutive equity on its balance sheet from the monetization in Q2. Newmark intends to use the net proceeds from the monetization to repay a portion of the $400M Converted Term Loan maturing September 8, 2019. After this repayment, approximately $247M of the Converted Term Loan will remain outstanding. Approximately $153M will also become available to be drawn upon under BGC's revolving credit facility. The monetization had no impact on the $93.5M Nasdaq payment expected to be recognized in Q3. Newmark retains the flexibility to monetize some or all of the anticipated more than $650M worth of remaining seven Nasdaq payments from 2021 through 2027.

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Publication:The Fly
Date:Jun 20, 2018
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