MF Global Holdings Ltd., the futures broker run by Jon Corzine, drew down on its revolving credit lines this week as the firm reported its biggest quarterly loss and had its ratings cut to junk by Moody's Investors Service and Fitch Ratings.
The company tapped the entirety of two bank lines, said three people with knowledge of the matter, speaking on condition of anonymity because the move wasn't disclosed. New York-based MF Global said in an Oct. 25 investor presentation that it had $1.3 billion in unused credit facilities, without giving a date for the tally.
MF Global has declined about 70 percent this week and its 6.25 percent bonds issued in August are trading at distressed levels as the firm seeks a buyer for its futures brokerage to raise capital. In its second downgrade this week of the firm, Moody's said "weak core profitability" drove the broker to increase risk buying European sovereign debt.
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