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

By Susanna Moon

Chicago, July 15 - MF Global Holdings Ltd. said investors tendered $9.34 million of its $205 million of 9% convertible senior notes due 2038 and 1,096,450 shares of its $150 million of 9.75% non-cumulative convertible preferred stock, series B.

The offer expired at 11:59 p.m. ET on July 14. The exchange offer began on June 1.

For each preferred, MF Global said it will issue 9.5694 common shares and pay a cash premium of $44.50 plus accrued dividends up to July 15. In total, the company will issue 10,492,366 shares and pay a cash premium of about $48.79 million for the tendered preferreds.

For each $1,000 principal amount of notes, the company will issue 95.6938 common shares and will pay a cash premium of $480.00, plus accrued interest up to July 15. In total, that will be 893,486 shares and $4.48 million in cash.

The cash premium was increased on June 30 from $41.00 for the preferreds and from $445 for the notes.

After settlement on July 15, $195.66 million principal amount of convertibles and 403,550 of preferreds will remain outstanding.

"We have taken a number of proactive steps to improve the company's credit profile, including increasing the permanency of our capital through an equity raise, enhancing the flexibility of our capital structure via the extension and amendment of our revolving credit facility and reducing high-cost instruments on our balance sheet," Randy MacDonald, chief financial officer of MF Global, said in a press release.

As previously noted, MF Global also solicited 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 tendered will be deemed to have consented to the termination.

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

MF Global previously said it would use the proceeds from its equity offering that closed on June 8 to pay the cash premium.

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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