Piper Jaffray Funding II enters into $400 million facility

By Jennifer Chiou

New York, Feb. 25 - Piper Jaffray Cos. subsidiary Piper Jaffray Funding II Inc. entered into a $400 million loan agreement with U.S. Bank NA on Feb. 19, according to an 8-K filing with the Securities and Exchange Commission.

The revolving credit facility is expected to be used to fund certain short-term municipal securities, including, without limitation, auction-rate securities and variable-rate demand notes.

Piper Jaffray Funding II may obtain $400 million under the loan while its subsidiary, Piper Jaffray &Co., may obtain a maximum of $200 million.

The advances will be secured by certain pledged assets of the companies.

Interest is payable monthly at Libor plus 200 basis points when the borrowings do not exceed $200 million. When the advances exceed that amount, the rate rises to Libor plus 225 bps.

The unpaid principal amount of all advances will be due on Aug. 19. Principal may be prepaid in whole or in part at any time without penalty.

Based in Minneapolis, Piper Jaffray is a middle-market investment bank and institutional securities firm.

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