Investment Banking

With a focus on identifying strategic growth opportunities and maximizing value, Jefferies' investment banking professionals continued to combine broad product knowledge with deep industry insight to provide our clients with outstanding advisory and capital raising services on more than 350 transactions valued at more than $145 billion in 2006.

	#1 in the performance of lead-managed equity underwritings 1
	#1 underwriter of single B debt under $150 million, five years running 2
	#2 M&A advisor for transactions less than $500 million 3

The Jefferies Investment Bank

Product expertise
Jefferies completed more than 165 capital raising transactions in 2006, leveraging several additions to our equity capital markets team. Despite a relatively quiet US IPO market, Jefferies helped clients raise more than $21 billion, nearly 50 percent more than in 2005, through more than 100 equity and equity-linked financings. Jefferies ranked #1 in the performance of lead-managed equity underwritings¹. With increased lending capabilities and the ability to commit capital, Jefferies' leveraged finance team helped clients raise nearly $15 billion, versus $6 billion in 2005, through nearly 60 high yield and bank loan transactions. Jefferies ranked as the #1 underwriter of single B debt under $150 million for the fifth consecutive year ².

Jefferies provided advisory services on nearly 200 announced assignments in 2006, up significantly from one year ago. We added an experienced senior professional to lead the firm's M&A efforts and supplemented our restructuring team. With an active M&A market, Jefferies worked on nearly 160 assignments valued at more than $30 billion, and ranked as the #2 M&A advisor for deals up to $500 million, across all industries³. In spite of one of the lowest corporate bond default rates in the last 20 years, Jefferies' restructuring assignments nearly doubled to over 30, valued at nearly $70 billion, and included many of the highest profile corporate bankruptcies in the US.

Helix Associates, in its first full year with Jefferies, added key personnel focused on North American GPs and LPs, and completed six fund placements valued at $9 billion, including the closing of the $600 million Jefferies Capital Partners fund. In addition, our financial sponsors and private capital group made considerable strides in serving our growing client base of private equity clients, with more than 80 transactions valued at nearly $11 billion.

Industry insight
Jefferies' dedicated industry groups all performed well during the year, with key additions to our healthcare, industrial, energy and maritime & oil service groups. Our technology, energy, and aerospace & defense groups were particularly strong in their respective sectors.

	We ranked as the #1 technology M&A advisor4, with more than 90 technology transactions valued at over $12 billion.
	We ranked as the #1 energy M&A advisor4, with over 60 energy transactions (including maritime & oil service) valued at over $12 billion.
	We ranked as the #1 aerospace & defense M&A advisor 4, with more than 40 aerospace & defense transactions valued at $8 billion.
	Our industrial, healthcare, media & communications, retail & consumer, gaming & leisure, and financial & business services groups collectively accounted for more than 150 transactions, valued at more than $36 billion.

Global reach
Jefferies' initiatives in Europe, the Middle East and Asia are gaining traction with dedicated teams and a rising number of European and Asian underwritings and cross-border advisory assignments for growing companies. In 2006, Jefferies completed more than 80 transactions, valued at more than $23 billion, for clients in these regions. Jefferies established a physical presence in Dubai, Singapore and Shanghai, and made significant inroads in India, having raised over $1 billion in convertible bond issuances for India-based companies over the last 18 months. We also established a presence in the Nordic region through an alliance with Ness Risan & Partners AS, a Norway-based consulting firm with shipping expertise. In addition, new memberships and status on European and Asian exchanges significantly broadened our reach and capabilities. We are staunchly committed to extending the strength of our US franchise to companies around the globe.