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Fitch Rates Jefferies Group, Inc. Senior Notes 'BBB'; Placed on Rating Watch Negative



  Fitch Rates Jefferies Group, Inc. Senior Notes 'BBB'; Placed on Rating Watch
  Negative

Business Wire

NEW YORK -- January 16, 2013

Fitch Ratings has assigned 'BBB' ratings to Jefferies Group, Inc.'s
(Jefferies) $600 million 5.125% senior unsecured notes due 2023 and $400
million 6.5% senior unsecured notes due 2043. The notes have been placed on
Rating Watch Negative, consistent with Jefferies' Long-Term Issuer Default
Rating. The proposed notes have been issued under Jefferies' shelf
registration.

The $1 billion issuance will marginally increase Jefferies' pro forma
leverage, according to Fitch's estimates. Fitch believes this transaction will
have a relatively modest impact on the firm's credit profile. The proposed
notes have significantly longer maturities than Jefferies' outstanding
unsecured notes, and therefore have a positive impact on the company's debt
maturity profile.

Approximately $250 million of the proceeds from the dual-tranche offering will
be used to pre-fund Jefferies' 5.875% senior notes due 2014 and approximately
$350 million of the proceeds to fund the required redemption of two series of
outstanding non-controlling membership interests in Jefferies High Yield
Holdings, LLC. The remaining $400 million will be used for general corporate
purposes.

RATING DRIVERS AND SENSITIVITIES

Jefferies' ratings were placed on Rating Watch Negative on Nov. 12, 2012 in
connection with the company's planned merger with Leucadia National Corp.
(Leucadia). Fitch expects to downgrade Jefferies' ratings by one notch upon
consummation of the merger. This reflects Fitch's view that after the proposed
merger, Jefferies would become much more exposed to the market risk inherent
in the other subsidiaries' investments at Leucadia. Conversely, becoming a
privately-owned company may help insulate Jefferies from external market
pressures similar to those experienced in November 2011 For more information,
please see the press release titled 'Fitch Places Jefferies' 'BBB' L-T IDR on
Rating Watch Negative on Proposed Merger with Leucadia,' available at
www.fitchratings.com.

Jefferies, a Delaware-incorporated holding company, is a well-established
full-service investment bank and institutional securities firm primarily
serving middle-market clients and investors. Its primary broker/dealer
operating subsidiary, Jefferies & Company, Inc., holds the vast majority of
the firm's consolidated assets and is regulated by the SEC. At Nov. 30, 2012,
Jefferies had U.S. GAAP total assets of $36.3 billion and shareholders' equity
of $3.4 billion (including non-controlling interests).

Fitch has assigned the following ratings:

Jefferies Group, Inc.

--$600 million 5.125% senior unsecured notes due 2023 'BBB'; Rating Watch
Negative;

--$400 million 6.5% senior unsecured notes due 2043 'BBB'; Rating Watch
Negative.

Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Securities Firms Criteria' (Aug. 15, 2012).

Applicable Criteria and Related Research:

Securities Firms Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686137

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contact:

Fitch Ratings
Primary Analyst
Joo-Yung Lee, +1-212-908-0560
Managing Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Ilya Ivashkov, CFA, +1-212-908-0769
Director
or
Committee Chairperson
Nathan Flanders, +1-212-908-0827
Managing Director
or
Media Relations:
Brian Bertsch, New York, +1-212-908-0549
brian.bertsch@fitchratings.com
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