MF Global plans to issue $250 million five-year convertibles to yield 1.75%-2.25%, up 25%-30%

By Rebecca Melvin

New York, Feb. 7 - MF Global Holdings Ltd. plans to price $250 million of five-year convertible senior notes after the close of markets Monday that were talked to yield 1.75% to 2.25% with an initial conversion premium of 25% to 30%, according to market sources.

Goldman Sachs & Co., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are the joint bookrunners of the registered offering, with Bank of America Merrill Lynch, J.P. Morgan Securities LLC, RBS Securities Inc. and Sandler O'Neill + Partners, LP acting as the co-managers.

There is a $37.5 million greenshoe.

Proceeds are earmarked to repay debt under a $1.2 billion revolving credit facility and for general corporate purposes, and to fund the cost of convertible note hedge transactions, which the company is entering into aimed at covering the number of shares of MG Global common stock that will initially underlie the notes.

The notes are non-callable for life. The notes are convertible prior to Aug. 1, 2015 if the price of shares for 20 out of 30 trading days is 130% of the conversion price. After Aug. 1, 2015, the notes are convertible at any time. The notes can be settled for cash or a combination of cash and shares.

New York-based MF Global is a global broker-dealer of commodities and listed derivatives.

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