"We're investing in the future of this business," Corzine said in a May statement that announced new hires in its commodities and derivatives areas. In August, the company sold $325 million in senior unsecured notes in order to repay part of its $1.2 billion revolving credit facility, according to past company statements.
In October, MF Global had its credit ratings cut by Moody's on concern that the broker wouldn't meet earnings targets and isn't sufficiently managing risk. Transactions in the debt of European governments hard hit by the region's sovereign debt crisis were among the issues cited by Moody's.
By Oct. 28, MF Global tapped the entirety of two bank lines, said three people with knowledge of the matter speaking on condition of anonymity since the move wasn't public. The company had said Oct. 25 that it had $1.3 billion in unused credit facilities, without giving a date for the tally.
MF Global increased net capital at the U.S. unit after the Financial Industry Regulatory Authority raised concern about the risks to its European debt portfolio, it said in September. MF Global owns $6.3 billion of Italian, Spanish, Belgian, Portuguese and Irish debt, the company said in an Oct. 25 presentation.
"We are confident that we have the resources, capital, liquidity and expertise to successfully manage our European exposures to their end date maturity of December 2012," Diana DeSocio, a spokeswoman for the broker, said in an Oct. 24 statement.
The case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).