Lazard to buy back its 6.12% notes at 100.5

By Susanna Moon

Chicago, May 2 - Lazard Group LLC agreed to purchase substantially all of Lazard Group's outstanding 6.12% senior notes due 2035 at 100.5% of par, according to an 8-K filing with the Securities and Exchange Commission.

The notes are part of Lazard Ltd.'s outstanding 6.65% equity security units and will be purchased in connection with the remarketing of the notes under terms of the units.

As a result of the remarketing, the notes will no longer be a component of the equity security units, the maturity will be reset to May 15, 2010, the annual interest rate will be reset to 4% and interest will be payable semi-annually in arrears.

The remarketing and related settlement of purchase contracts underlying the units are expected to close on May 15.

Each equity security unit initially consisted of 2½% interest in a $1,000 note and a purchase contract requiring holders on May 15 to pay $25 for a number of Lazard Ltd. class A common shares, ranging from 0.8333 to 1, based upon the stock's market value from April 15 to May 12.

Upon close of the remarketing and subject to adjustment based on the market value of the common stock for the remainder of the reference period, Lazard Ltd. expects to issue about 14.6 million common shares for $437.5 million and Lazard Group or one of its subsidiaries expects to purchase substantially all of the outstanding notes for $439.7 million.

Previously Lazard said the company is repurchasing the remarketed notes because current conditions in the debt capital markets may make remarketing the notes to third parties unadvisable at this time. The repurchase will be funded from the company's cash position.

Lazard Freres & Co. LLC is the remarketing agent and will receive a remarketing fee of 0.25% of the principal amount of remarketed notes. Additional information can be obtained from Lazard Investor Relations (212 632-1905).

Lazard is a New York-based financial advisory and asset management firm.

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