Investment brokerage company, Jefferies Group, Inc. (JEF) recently raised funds amounting to $1 billion from the market through issuance of senior notes in two tranches, one of $600 million and another of $400 million.
The first lot comprised 5.125% of Senior Unsecured Fixed Rate Notes due to mature on January 20, 2023. These notes are expected to yield 5.161% at maturity and were offered at 99.721% of the principal amount.
The second lot consisted of 6.50% of Senior Unsecured Fixed Rate Notes, maturing on January 20, 2043. The notes were issued at 98.79% of the principal amount and are expected to yield 6.593% on maturity.
Moody’s conferred a Baa3 (Stable) rating on these notes while a BBB (Negative) rating was provided by both S&P and Fitch credit rating agencies. Interest payments will be made semi-annually with the first payment due to accrue on July 22, 2013. The proceeds from the borrowing are likely to be used for repaying existing debts.
In November 2012, Jefferies Group announced a merger agreement with Leucadia National Corporation (LUK), according to which, for each share, shareholders of Jefferies’ will receive 0.81 shares of Leucadia. The merger is expected to consummate in the first quarter of 2013.
The Zacks Consensus Estimate for the fiscal first quarter 2013 is 36 cents per share, up 13.5% year over year. Estimates for fiscal 2013 and 2014 stand at $1.44 and $1.64 per share, representing year-over-year increase of 18.0% and 14.2%, respectively.
Currently, Jeffries carries a Zacks #4 (Sell) Rank while its nearest peer company, Duff & Phelps Corporation (DUF) has a Zacks #2 Rank (a short-term Buy rating).
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