Leucadia $200 million overnight convertible talked at 3.75-4.0%, up 27-30%

By Ronda Fears

Nashville, April 21 - Leucadia National Corp. launched $200 million of 10-year non-callable convertible notes talked to yield 3.75% to 4.0% with a 27% to 30% initial conversion premium.

Jefferies & Co. is sole bookrunner of the Rule 144A deal, which is slated to price before the open Thursday.

The senior debentures are expected to be rated BB+.

The New York-based conglomerate is involved in telecom, banking, manufacturing, real estate, wine making, copper mining and reinsurance.

Leucadia shares closed Wednesday down 90 cents, or 1.67%, to $53, and in after-hours trading the stock was down another 91 cents, or 1.72%.

Leucadia has been butting head-to-head with Vulcan Energy Corp. in an aggressive play for Houston-based independent oil and gas producer Plains Resources Inc., which has rejected Leucadia's proposals twice. Vulcan Energy is a unit of Vulcan Capital, the private investment group of Vulcan Inc., founded by Microsoft Corp. co-founder Paul Allen.

Plains Resources has agreed to Vulcan's cash takeover offer of $16.75 per share but said in a news release Friday that it would make another review of the Leucadia proposal based on its impact to the company's credit profile if it merged with Leucadia. Plains Resources and Leucadia have asked Moody's to make a review, which is under way, according to the company.

On March 19, Leucadia said its revised bid would value Plains Resources stock at about $18 per share, consisting of notes backed by the company's Plains All American Pipeline LP, preferred stock and $12.9 million in cash. During March, Leucadia sold a split-rated $100 million add-on to its 7% senior notes due 2013 (Ba1/BBB-/BBB-), via Jefferies, and in a Securities and Exchange Commission filing said it had contracted to sell some 97% of its subprime and collateralized consumer loan portfolio.

On March 31, Plains All American Pipeline announced the acquisition of assets from Link Energy LLC for $330 million with initial financing via a $100 million private equity placement and new $200 million bank facility, but the company said it will be looking to access the long-term capital markets for refinancing opportunities over the next several months. The private equity was sold to Kayne Anderson Capital Advisors, Vulcan Capital and Tortoise Capital Advisors, with $40 million committed by Vulcan.

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