Weyerhaeuser plans $500 million convertible mandatory preferreds at 6.375%-6.875%, up 15%-20%

By Rebecca Melvin

New York, June 17 - Weyerhaeuser Co. plans to offer $500 million of mandatory convertible preferred shares at par of $50 after the market close Tuesday that were talked to yield 6.375% to 6.875% with an initial conversion premium of 15% to 20%, according to market sources.

The registered, off-the-shelf deal has a $75 million greenshoe and was being sold via Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., and Citigroup Global Markets Inc. as joint bookrunning managers.

The series A preferreds have dividend protection at a quarterly dividend threshold of $0.22 and cash takeover protection.

The securities will automatically convert into a variable number of shares on July 1, 2016.

Proceeds will be used to finance the company's previously announced acquisition of Longview Timber LLC and for debt repayment.

Weyerhaeuser is a timber company based in Federal Way, Wash.

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