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Contributors: Douglas McIntyre Jon C. Ogg

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Wednesday, October 18, 2006

NYMEX Closer to Setting IPO Terms

The New York Mercantile Exchange, the "NYMEX," has narrowed its proposed IPO terms. This has been in the hopper for some time, but now with the CME and the CBOT merging there is likely a higher need to price their offering sooner rather than later. It has now set a range of $48.00 to $52.00 per share. The selling holders will receive the proceeds, so the exchange itself will not really be receiving funds.

The underwriters are listed at J.P.Morgan and Merrill Lynch as joint book-runners; Banc of America, Citigroup, Lehman, and Sandler Oneill as co-managers. The proposed ticker is "NMX."

The exchange was formed in 1872 for the introduction of a heating oil contract.

For the first 6 months of 2006 the exchange posted revenues of $297.5 million and net income of $71.76 million. That is up from $155 million and $28 million respectively for the first 6 months in 2005, no doubt as a result of much larger energy contracts and actual commodity trading both growing exponentially.

Jon C.Ogg
October 18, 2006

Here is how the company lists its physical commodities trading stats: We are the largest physical commodity-based futures exchange and clearinghouse in the world and the third-largest futures exchange in the United States measured by 2005 contract volume. In 2005, we were the world’s largest exchange for the trading of energy futures and options contracts and approximately 63% of all globally listed energy futures and options contracts were traded on our Exchange. Approximately 77.2 million contracts of our light sweet crude oil futures and options products traded and cleared in 2005, making light sweet crude oil the largest and most liquid global benchmark for energy futures and options. Although certain other exchanges offer metals contracts of smaller sizes, in 2005, we were also the largest exchange in the world for the trading and clearing of precious metals based on product volume, as calculated by aggregating contracts of smaller sizes into contracts of comparable sizes to those traded on our Exchange, with approximately 30.8 million contracts traded and cleared. Our gold futures contract is the most liquid precious metals futures contract in the world with approximately 19.6 million contracts traded and cleared in 2005 based on product volume, as calculated by aggregating contracts of smaller sizes into contracts of comparable sizes to those trade on our Exchange.

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