McMoRan to offer $150 million mandatory convertible preferreds due 2010; talked at 6.75%-7.25%, up 18%-22%

By Evan Weinberger

New York, Oct. 25 - McMoRan Exploration Co. launched $150 million in mandatory convertible preferred stock due Nov. 15, 2010. The mandatories are talked to yield 6.75% to 7.25% with an initial conversion premium of 18% to 22%.

The deal is expected to price Nov. 1.

JPMorgan and Merrill Lynch are the joint bookrunners of the registered transaction, which will be issued under McMoRan's existing shelf registration.

There is a $22.5 million over-allotment option.

The mandatories will be issued at the same time as 11 million shares of McMoRan common stock. There is a 1.65 million greenshoe on the common stock offering.

The mandatories have full dividend and change-of-control protections.

McMoRan is a New Orleans-based oil and gas driller with operations in the Gulf of Mexico and on shore along the Gulf Coast. McMoRan intends to use the proceeds from the offerings to repay a portion of a bridge facility used in connection with the acquisition of the Gulf of Mexico shelf oil and gas properties of Newfield Exploration Co.

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