In addition to bearing fixed 5.5% interest that accrues from the issue date, starting in 2008, LNR will pay extra interest in specific six-month periods in the amount of 0.1875% of the market price of the notes, if at the end of the prior six-month period, the market price of the notes is more than $1,200 per $1,000 in principal amount.

The notes will be changeable into LNR common stock at a $45.28 conversion price per share in certain situations, such as when the market price of the common stock is more than 120% of the conversion price. LNR plans to use about $100 million in net proceeds from the notes sale to repay senior secured and unsecured revolving credit debt.

The company plans to use the rest of the proceeds to repurchase shares of its common stock, including shares sold short by buyers of the notes and shares LNR buys in market transactions as part of a 9.5 million share repurchase program. Under the program, LNR already has purchased 6.2 million shares, 1.2 million of them in the current fiscal year, which started Dec. 1.

Proceeds that LNR does not use as anticipated will go toward general corporate purposes.

LNR will be able to redeem the notes for cash starting in 2008. If LNR calls the notes, the holders will be able to convert them regardless of whether they normally would be convertible then. Holders can require LNR to repurchase the notes in 2010 and 2017. If they do so, LNR will be able to pay the repurchase price in cash or with shares of its common stock.