Vector to swap $103.98 million 6.75% convertible floaters for $97.18 million 5% convertible floaters

By Susanna Moon

Chicago, June 16 - Vector Group Ltd. said it agreed to issue $103.98 million principal amount of its 6.75% variable interest senior convertible exchange notes due 2014 in exchange for $97.18 million principal amount of its 5% variable interest senior convertible notes due 2011, valued at 107% of par.

Holders may convert the notes into common shares at a conversion price of $17.06 per share, or at a conversion rate of 58.6063 common shares per $1,000 principal amount of notes.

The notes will mature on Nov. 15, 2014. Interest is payable quarterly and will accrue at 3.75% per year, with additional interest equal to the amount of cash dividends on the company's common stock during the prior three-month period ending on the record date for each interest payment times the number of common shares into which the notes are convertible on the record date.

Annual interest payable will be the higher of the total interest or 6 ¾%.

Miami-based Vector Group is a holding company that indirectly owns Liggett Group LLC, Vector Tobacco Inc. and New Valley LLC.

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