XML 73 R14.htm IDEA: XBRL DOCUMENT v3.20.1
Lines of Credit
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Lines of Credit

NOTE 8 – LINES OF CREDIT

The following table shows the composition of the Partnership's aggregate bank lines of credit in place as of December 31, 2019 and 2018:

 

 

 

2019

 

 

2018

 

2018 Credit Facility

 

$

500

 

 

$

500

 

Uncommitted secured credit facilities

 

 

290

 

 

 

290

 

Total bank lines of credit

 

$

790

 

 

$

790

 

 

In accordance with the terms of the Partnership's $500 committed revolving line of credit (the "2018 Credit Facility") entered into in September 2018, the Partnership is required to maintain a leverage ratio of no more than 35% and minimum Partnership capital, net of reserve for anticipated withdrawals and Partnership loans, of at least $1,884.  In addition, Edward Jones is required to maintain a minimum tangible net worth of at least $1,344 and minimum regulatory net capital of at least 6% of aggregate debit items as calculated under the alternative method.  The Partnership has the ability to draw on various types of loans. The associated interest rate depends on the type of loan, duration of the loan, whether the loan is secured or unsecured and the amount of leverage. Rates include the federal funds rate plus the applicable rate, eurodollar rate plus the applicable rate, and the Alternative Base Rate plus the applicable rate. The 2018 Credit Facility is intended to provide short-term liquidity to the Partnership should the need arise.  As of December 31, 2019, the Partnership was in compliance with all covenants related to the 2018 Credit Facility.

 

In addition, the Partnership has multiple uncommitted lines of credit, including $290 of uncommitted secured lines of credit that are subject to change at the discretion of the banks and a new uncommitted line of credit entered into in September 2019. The amount available on the new line of credit and the associated collateral requirements are at the bank's discretion upon the event of a borrowing.  Based on credit market conditions and the uncommitted nature of these credit facilities, it is possible that these lines of credit could decrease or not be available in the future.  Actual borrowing availability on the uncommitted secured lines is based on availability of client margin securities or firm-owned securities, which would serve as collateral on loans in the event the Partnership borrowed against these lines. In February 2020, the Partnership increased the $290 uncommitted lines of credit to $390 with $250 unsecured for up to three days after borrowing.

There were no amounts outstanding on the 2018 Credit Facility or the uncommitted lines of credit as of December 31, 2019 or December 31, 2018.  In addition, the Partnership did not have any draws against these lines of credit during the years ended December 31, 2019 and 2018, except for periodically testing draw procedures.