UPDATE 1-Lazard issues 14.6 mln shrs, trims debt

NEW YORK, May 16 (Reuters) - Investment bank Lazard Ltd on Friday said it issued 14.6 million common shares worth about $150 million to buy back convertible debt sold during its 2005 initial public offering, a transaction boosting its book value and trimming debt levels.

As part of it IPO, Lazard issued $436 million of ESUs, essentially units that must be converted back into stock after three years. Two weeks ago Lazard disclosed in a filing it would "remarket" the ESUs and ultimately chose to buy the entire offering.

About 5 million of the shares were issued to France's Natixis SA (CNAT.PA), which increased its stake in Lazard to 7 million shares, or 8 percent.

The transaction will have no material impact on earnings, but it does strengthen the balance sheet. Total debt falls to $1.4 billion from $1.7 billion, while stockholders' equity rises to $473 million from $36 million.

Under the unusual circumstances of Lazard's IPO, when CEO Bruce Wasserstein bought out the firm's partners, Lazard went public with negative $1 billion book value. The advisory firm's equity has risen since then, bolstered by a secondary stock offering and retained earnings.

Bermuda-based Lazard has about 120 million shares outstanding, including treasury shares. U.S.-fund managers Jennison Associates were the bank's largest shareholders at the end of March with 8.9 million shares. (Reporting by Joseph A. Giannone; Editing by Christian Wiessner)