Icahn Enterprises L.P.’s stock jumped 14% in premarket trade Monday, after The Wall Street Journal reported that Carl Icahn and banks finalized amended loan agreements Sunday that untie his personal loans from the trading price of his company’s shares.
The personal indebtedness had been fully disclosed by Icahn in securities filings, but few on Wall Street seemed to take notice. While Icahn himself can play a big role in the stock market with activist campaigns he wages against corporate boards, IEP itself isn’t a widely followed stock because Icahn and his son Brett own 84% of the units.
The amended loan agreements increase Icahn’s collateral and set up a plan for him to fully repay the loans in three years, the Journal reported, citing people familiar with the matter. That means the only factor that could now trigger margin calls is movement in the net asset value of his investments.
“Over the years I have made a great deal of money with money,” he was quoted as having said. “I like to have a war chest, and doing that gave me more of a war chest.” Meanwhile, investors are waiting to see the outcome of a federal probe of IEP’s corporate governance and other issues, which was disclosed along with first-quarter earnings.
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