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Pru To Borrow $2.3 Billion

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Prudential Financial Inc. says it will be selling up to $2.3 billion in convertible, variable-rate senior notes to institutions and wealthy, sophisticated individuals.

Prudential, Newark, N.J., will start off by issuing $2 billion in notes, and it could issue up to $300 million in additional notes if the original issue sells out.

Prudential expects to complete the private placement by Tuesday.

The notes are due 2036, and they will pay an annual rate equal to the 3-month London Interbank Offered Rate, reset quarterly, minus 2.4 percentage points.

Prudential can redeem all of the convertible notes for cash on or after Dec. 13, 2007, buy paying 100% of the principal plus accrued interest.

The holders can make Prudential buy the notes back for cash on the 1-, 2-, 3-, 4-,5-, 10-, 15-, 20- and 25-year anniversaries of the issue date.

Prudential is borrowing the money by issuing the notes to buy an investment-grade fixed-income investment portfolio and for “general corporate purposes,” the company says.

Risks affecting the performance of the notes could include acquisitions, divestitures and restructurings, Prudential says.