Robinhood Securities (RHS), a California-based broker-dealer, for the second time has amended its credit agreement with a bank syndicate led by JP Morgan Chase and now has access to a revolving credit facility with a total commitment of $2.175 billion. This follows changes to the $2.275 billion facility the securities trading business signed in April last year.

Robinhood Makes Second Amendment

Robinhood entered this second amendment deal on March 24, 2023, according to the firm's Form 8-K filed before the US Securities and Exchange Commission (SEC).

“The Credit Agreement requires RHS to maintain a minimum consolidated tangible net worth and a minimum excess net capital, and subjects RHS to a specified limit on minimum net capital to aggregate debit items,” Robinhood wrote in the filing signed by Jason Warnick, the Chief Financial Officer of Robinhood Markets, the parent company of Robinhood Securities.

Furthermore, the filing states that as of March 24, there was no borrowings outstanding under the amended agreement; hence, a total of $2.175 billion remains available to the broker-dealer.

Robinhood Securities first entered into the 364-day senior secured revolving credit facility for $2.18 billion in April 2021. However, on April 11 last year, the facility was amended to $2.275 billion, which has now been further amended to $2.175 billion.

Developments at Robinhood

Meanwhile, in its January 2023 operating data, Robinhood Markets reported a 31% year-over-year decline in the number of monthly active users. The users dropped from 17.3 million to 12 million. However, month-over-month, total users rose by 600,000 from 11.4 million a month earlier.

The US-based commission-free stock trading and investment platform also recently shelved its plans to re-enter the United Kingdom through acquisition of Ziglu, a cryptocurrency portfolio investment platform. The company first announced plan to take over Ziglu in April last year and made subsequent efforts to cut down the price of the acquisition by 57% from $170 million to $72.5 million, citing market conditions. It finally cancelled the deal last month.

In a different development, Robinhood's crypto arm has also drawn the attention of the SEC. The company disclosed last month that it received an investigative subpoena from the US securities regulator enquiring about its cryptocurrency listings.