Legg Mason prices $1 billion sale of special class of stock

BALTIMORE—Legg Mason Inc. said Wednesday it priced an offering of a special class of stock the investment manager is selling to raise $1 billion. The company expects the sale to close Monday.

After reporting a $255.5 million loss for the fiscal fourth quarter this week, Legg Mason said it planned to raise $1 billion by selling 20 million "equity units" for $50 each.

These units entitle the owner to buy a share of Legg Mason's stock at a certain price and 5 percent of a $1,000 bond.

The holders of the equity units can convert to Legg Mason stock at $67.56 per share, which represents a 20 percent premium to the company's current stock price.

Citi, Merrill Lynch, Goldman Sachs and JPMorgan are running the sale. The underwriters were granted options to buy up to 3 million equity units at the same price.

The company said it plans to use proceeds from the sale to continue supporting some of its money-market funds, which have run into trouble because of loans they issued that have turned unreliable and illiquid.

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