Bloomberg News

Jefferies 8.5% Bonds Due in 2019 Fall to Record, Trace Data Show

November 15, 2011

Nov. 15 (Bloomberg) -- Bonds from Jefferies Group Inc. issued in June 2009 fell to a record low closing price, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The $700 million of 8.5 percent senior unsecured notes maturing in July 2019 fell 2.5 cents to 92.25 cents on the dollar with a yield of 10 percent at 4:32 p.m. in New York, according to Trace. The securities have dropped from 109.3 cents on Oct. 25 and pay 7.92 percentage points more than similar- maturity U.S. Treasuries.

The New York-based investment bank is ranked Baa2 by Moody’s Investors Service and BBB by Standard & Poor’s. Debt of that grade typically pays a spread of 2.9 percentage points, Bank of America Merrill Lynch index data shows. High yield, high-risk bonds, which are ranked below Baa3 by Moody’s and less than BBB- by S&P, pay a 7.44 percentage point spread.

The bonds have slumped after broker MF Global Holdings Ltd. filed for bankruptcy last month after betting on European sovereign debt. Jefferies 8.5 percent debt fell as low as 82 cents on Nov. 3 and closed at 96.5 cents that day, Trace data show.

Jefferies said in a Nov. 7 statement that it reduced gross holdings in sovereign securities of Portugal, Italy, Ireland, Greece and Spain by almost 50 percent.

--Editor:

To contact the reporter on this story: Pierre Paulden in New York at ppaulden@bloomberg.net

To contact the editor responsible for this story: John Parry at jparry5@bloomberg.net


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