Forestar to price $100 million seven-year convertibles next Wednesday

By Rebecca Melvin

New York, May 31 - Forestar (USA) Real Estate Group Inc., a subsidiary of Forestar Group Inc., plans to price $100 million of seven-year convertible notes next week on June 8, concurrently with $150 million of eight-year straight notes, according to a syndicate source.

Price talk on the convertible paper, which has a $15 million greenshoe, wasn't available at press time.

Goldman Sachs & Co. is bookrunner of the Rule 144A offering.

In connection with the convertibles, Forestar intends to enter into privately negotiated capped call transactions with one or more financial institutions, which may include the initial purchasers.

Proceeds from the convertible offering are earmarked for general corporate purposes, including investments in strategic growth opportunities, and to pay the cost of the capped call transactions.

Proceeds of the secured straight notes are earmarked to repay borrowings under Forestar's senior secured term loan, with any remaining amount being used for general corporate purposes, which may also include repayment of borrowings under its revolving loans.

Forestar is an Austin, Texas-based company engaged in real estate and natural resources businesses.

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