Jefferies Debt Due in 2012 Rises After Broker Details European Holdings

Bonds from Jefferies Group Inc. rose a day after the broker said it made further cuts to its holdings of European sovereign debt and rebutted “malicious lies and false rumors” about its financial health in a letter on its website.

The investment bank’s $550 million of senior unsecured 6.875 percent notes due in April 2021 added 2.4 cents to 81.4 cents on the dollar as of 10:36 a.m. in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. The bonds, which fell to as low as 75 cents on Nov. 17 after trading at 100.1 cents in October, yield 10 percent, or 8 percentage points more than similar-maturity Treasures, Trace data show.

Jefferies has reduced its holdings of debt from Greece, Ireland, Italy, Portugal and Spain by about 75 percent, Richard Handler, its chairman and chief executive officer, wrote in the letter yesterday. The New York-based company’s stock and bonds have fallen since MF Global Holdings Ltd. disclosed a $6.3 billion bet on European bonds that contributed to its Oct. 31 bankruptcy.

Jefferies’s 7.75 percent notes due in March 2012 rose 0.7 cent to 99.25 cents for a yield of 10.2 percent, Trace data show. The company has bought back $50 million of the debt in recent weeks and has $255 million of these securities outstanding, Handler said in the letter.

To contact the reporter on this story: Pierre Paulden in New York at ppaulden@bloomberg.net

To contact the editor responsible for this story: John Parry at jparry5@bloomberg.net

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