McMoRan Exploration $75 million convertible talked to yield 5.0%-5.5%, up 25%-30%

Nashville, Sept. 23 - McMoRan Exploration Co. launched early Thursday $75 million of seven-year convertible senior notes talked to yield 5.0% to 5.5% with a 25% to 30% initial conversion premium for pricing next week.

JPMorgan and Merrill Lynch are joint bookrunners of the Rule 144A deal.

Coupon payments will be collateralized with Treasuries for three years.

The issue is non-callable for five years, then with a 130% hurdle.

There is full dividend protection by way of a conversion ratio adjustment.

An $11.25 million greenshoe is available.

New Orleans-based McMoRan, an oil and gas producer, is also selling 5 million shares of common stock, and a 15% greenshoe, with proceeds earmarked to finish drilling near-term oil and gas prospects, continuing development of the Main Pass Energy Hub project and for working capital.

Merrill Lynch and JPMorgan also are joint bookrunners on the stock offering, with Hibernia Southcoast Capital, Jefferies & Co. Inc. and Sterne Agee & Leach Inc. as co-managers.

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