MF Global begins exchange offer for 9% convertibles, 9.75% preferreds

By Angela McDaniels

Tacoma, Wash., June 1 - MF Global Holdings Ltd. began an exchange offer for its $205 million of 9% convertible senior notes due 2038 and $150 million of 9.75% non-cumulative convertible preferred stock, series B, according to a company news release.

For each $1,000 principal amount of notes, MF Global will pay 95.6938 shares of its common stock plus a premium of $445.

For each preferred, the company will pay 9.5694 shares of common stock plus a premium of $41.

At the company's option, the premiums will be paid either in cash or by delivery of a number of additional shares equal to the volume-weighted average price of its common stock over the five trading days ending June 25, subject to a minimum average price.

Holders will also receive accrued interest or dividends, as applicable, up to but excluding the settlement date.

MF Global is also soliciting consents from holders of the 9% convertibles to the termination of a replacement capital covenant made for their benefit in connection with the issuance of the company's series A preferred stock in 2008. Holders who tender will be deemed to have consented to the termination.

Consents are needed from holders of a majority of the principal amount outstanding of the notes in order to terminate the covenant.

The offer will expire at 11:59 p.m. ET on June 29.

U.S. Bank NA is the exchange agent, and the information agent is Georgeson, Inc. (212 440-9800 for banks and brokers, others call 866 828-4304).

MF Global is a cash and derivatives brokerage firm based in New York.

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