Long-Term Debt

3 Months Ended

Feb. 29, 2012

Short-Term Borrowings/Long-Term Debt [Abstract]

Long-Term Debt

Note 13. Long-Term Debt

Our long-term debt is accounted for on an amortized cost basis. The following summarizes our long-term debt carrying values (including unamortized discounts and premiums) at February 29, 2012 and November 30, 2011 (in thousands):

	February 29, 2012		November 30, 2011
Unsecured Long-Term Debt
7.75% Senior Notes, due 2012 (effective interest rate of 8.08%)(1)	$	253,269	$	254,926
5.875% Senior Notes, due 2014 (effective interest rate of 6.00%)		249,363		249,298
3.875% Senior Notes, due 2015 (effective interest rate of 3.92%)		499,235		499,187
5.5% Senior Notes, due 2016 (effective interest rate of 5.57%)		349,095		349,045
5.125% Senior Notes, due 2018 (effective interest rate of 5.18%)		768,133		782,598
8.5% Senior Notes, due 2019 (effective interest rate of 8.31%)		707,593		707,787
6.875% Senior Notes, due 2021 (effective interest rate of 6.99%)		545,895		545,816
6.45% Senior Debentures, due 2027 (effective interest rate of 6.55%)		346,695		346,664
3.875% Convertible Senior Debentures, due, 2029 (effective interest rate of 7.20%)		283,994		280,832
6.25% Senior Debentures, due 2036 (effective interest rate of 6.37%)		492,805		492,773
	$	4,496,077	$	4,508,926
Secured Long-Term Debt
Credit facility, due 2014		250,000		100,000
	$	4,746,077	$	4,608,926

(1) Subsequent to quarter end, our 7.75% Senior Notes matured on March 15, 2012 and were repaid.

Our U.S. broker-dealer, from time to time, makes a market in our long-term debt securities (i.e., purchases and sells our long-term debt securities). During November and December 2011, there was extreme volatility in the price of our debt and a significant amount of secondary trading volume through our market-making desk. Given the volume of activity and significant price volatility, purchases and sales of our debt were treated as debt extinguishments and reissuances of debt, respectively. We recognized a $9.9 million gain on debt extinguishment which is reported in Other revenues for the three months ended February 29, 2012. The balance of Long-term debt has been reduced by $37.1 million as a result of the repurchase and subsequent reissuance of our debt below par during November and December 2011, which is being amortized over the remaining life of the debt using the effective yield method.

We previously issued 3.875% convertible senior debentures (the “debentures”), due in 2029, with an aggregate principal amount of $345.0 million, each $1,000 debenture currently convertible into 26.3603 shares of our common stock (equivalent to a conversion price of approximately $37.94 per share of common stock). In addition to ordinary interest, beginning on November 1, 2017, contingent interest will accrue at 0.375% if the average trading price of a debenture for 5 trading days ending on and including the third trading day immediately preceding a six-month interest period equals or exceed $1,200 per $1,000 debenture. The debentures are convertible at the holders’ option any time beginning on August 1, 2029 and convertible at any time if 1) our common stock price is greater than 130% of the conversion price for at least 20 trading days in a period of 30 consecutive trading days; 2) if the trading price per debenture is less than 95% of the price of our common stock times the conversion ratio for any 10 consecutive trading days; 3) if the debentures are called for redemption; or 4) upon the occurrence of specific corporate actions. We may redeem the debentures for par, plus accrued interest, on or after November 1, 2012 if the price of our common stock is greater than 130% of the conversion price for at least 20 days in a period of 30 consecutive trading days and we may redeem the debentures for par, plus accrued interest, at our election any time on or after November 1, 2017. Holders may require us to repurchase the debentures for par, plus accrued interest, on November 1, 2017, 2019 and 2024.

We previously entered into a fair value hedge with no ineffectiveness using interest rate swaps in order to convert $200 million aggregate principal amount of unsecured 7.75% Senior Notes due March 15, 2012 into floating rates based upon LIBOR. During the third quarter of 2007, we terminated these interest rate swaps and received cash consideration of $8.5 million, net of accrued interest, which is being amortized as a reduction in Interest expense of approximately $1.9 million per year over the remaining life of the notes. As of February 29, 2012, approximately $37,000 remained to be amortized.

Secured Long-Term Debt — On August 26, 2011 we entered into a committed senior secured revolving credit facility (“Credit Facility”) with a group of commercial banks in Dollars, Euros and Sterling, in aggregate totaling $950.0 million, of which $250.0 million can be borrowed unsecured. Borrowers under the Credit Facility are Jefferies Bache Financial Services, Inc., Jefferies Bache, LLC and Jefferies Bache Limited. The Credit Facility is guaranteed by Jefferies Group, Inc. and contains financial covenants that, among other things, imposes restrictions on future indebtedness of our subsidiaries, requires Jefferies Group, Inc. to maintain specified level of tangible net worth and liquidity amounts, and requires certain of our subsidiaries to maintain specified levels of regulated capital. The Credit Facility terminates on August 26, 2014. Interest is based on the Federal funds rate or, in the case of Euro and Sterling borrowings, the Euro Interbank Offered Rate and the London Interbank Offered Rate, respectively. At February 29, 2012, U.S. dollar denominated borrowings outstanding under the Credit Facility amounted to $250.0 million and are secured by assets included in the borrowing base amount, as defined in the Credit Facility agreement. There were no non-U.S. dollar borrowings at February 29, 2012. We were in compliance with debt covenants under the Credit Facility at February 29, 2012.