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(NEW YORK) - Jefferies Group, Inc. (NYSE: JEF) today announced that the Massachusetts Mutual Life Insurance Company ("MassMutual") has agreed in principle to purchase in a private placement $125 million of Series A convertible preferred stock of Jefferies. The principal terms of the Series A Preferred will include a 3.25% annual, cumulative cash dividend with a conversion price of $62 per share. The preferred stock will be callable after 10 years and will mature in January of 2036.
Jefferies and MassMutual have also reached an agreement in principle to double their equity commitments to Jefferies Babson Finance LLC, the joint venture the two firms formed in October 2004. With an incremental $125 million from each partner, the new total committed equity capitalization of the finance company is $500 million.
The incremental capital will allow Jefferies Babson Finance to continue to grow its business of offering senior loans to middle market and growth companies, originated primarily through the investment banking efforts of Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. Babson Capital Management LLC, a MassMutual affiliate, will continue to provide primary credit analytics and portfolio management services.
"We are extremely pleased to expand our strategic and operating relationship with Jefferies," commented Roger Crandall, Chief Investment Officer of MassMutual and Chairman of Babson Capital. "We are impressed with the middle market franchise Jefferies has developed and believe our significant investment and association with Jefferies will be of great benefit to our policyholders."
"I have worked with the individuals at MassMutual and Babson Capital for over 18 years," said Richard B. Handler, Chairman and Chief Executive Officer of Jefferies. "We are particularly pleased that this world-class organization has agreed to become significant, long-term shareholders and partners of Jefferies. The further development of Jefferies Babson Finance will allow us to better serve our expanding client base of growing and mid-sized companies and financial sponsors."
The expansion of Jefferies Babson Finance and the preferred stock investment by MassMutual have received all necessary corporate approvals subject to the finalization of documentation. The transactions are expected to be completed shortly
Jefferies, a leading investment bank for growing and mid-sized companies, has more than 350 investment banking professionals and $1.5 billion in total 2005 annual revenues, $495 million of which come from investment banking activities.
About Jefferies
Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for over 40 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com).
About MassMutual
MassMutual Financial Group is a global, growth-oriented, diversified financial services organization providing life insurance, annuities, disability income insurance, long-term care insurance, retirement planning products, structured settlement annuities, trust services, money management, and other financial products and services.
The MassMutual Financial Group is a marketing designation (or fleet name) for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliates, which include: OppenheimerFunds, Inc.; Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; MML Investors Services, Inc., member FINRA and SiPC (www.finra.org www.sipc.org); The MassMutual Trust Company, FSB; MML Bay State Life Insurance Company, C.M. Life Insurance Company, and MassMutual International, Inc.
About Babson Capital
Babson Capital serves institutional and retail investors in the U.S. and abroad, as well as high net worth individuals and family offices. The firm offers a wide range of relative return, absolute return, co-investing, financing and customized mandates utilizing equity, fixed-income and derivative instruments. Based in Boston and Springfield, Massachusetts, the firm has six additional offices in the U.S. and an indirect subsidiary, Babson Capital Europe Limited, in London. Babson Capital is a member of the MassMutual Financial Group.
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