MeriStar completes new convertibles sale, proceeds to redeem 4 ¾% 04 converts

New York, July 2 - MeriStar Hospitality Corp. (Caa1/CCC) said that it had completed its previously announced sale of $170 million of new 9 ½% convertible subordinated notes due 2010. Deal proceeds are to be used to redeem the company's existing 4 ¾% convertible subordinated notes due 2004 "as soon as practicable after the closing of the offering."

As previously announced, MeriStar Hospitality, a Washington, D.C. based real estate investment trust specializing in lodging industry properties, said on June 26 that it had priced an offering of $155 million principal amount of new 9 ½% convertible subordinated notes due 2010, with a greenshoe option for an additional $15 million of notes, and would use the net proceeds from the offering to repurchase or redeem substantially all of the company's outstanding 4 ¾% convertible notes.

(The 4 ¾% notes were originally issued by CapStar Hotel Co. in October, 1997; CapStar merged with American General Hospitality Corp. in August, 1998 to form MeriStar. In its recent 424B prospectus for the new notes filed with the Securities and Exchange Commission, MeriStar said it had $154.3 million of the notes outstanding as of March 31).

It said that any net proceeds not used in the purchase or redemption of the 4 ¾% notes would likely be used to repurchase other debt.

Weatherford Int'l to redeem 5% 27 convert debentures with stock offer proceeds

New York, July 2 - Weatherford International Ltd. (Baa2) said that it would sell common shares and use the proceeds to redeem all of its outstanding 5% convertible subordinated preferred equivalent debentures due 2027.

Weatherford said in its most recent 424B prospectus for the stock offering filed with the Securities and Exchange Commission that it anticipated net proceeds of $399.5 million, and that it would use them, along with $13.1 million of the company's working capital funds, to fully redeem the 5% convertible debentures for approximately $412.6 million.

Weatherford, a Houston-based oilfield services company, said that it had entered into into an underwriting agreement with Lehman Brothers to sell 10 million common shares. Lehman will act as the sole underwriter.

The company said that it has also granted to Lehman an over-allotment option to purchase up to an additional 1.5 million shares. The common shares will be issued under Weatherford's universal shelf registration statement. Weatherford expects the issuance and delivery of the common shares to occur on July 3.

Weatherford estimated the expected net proceeds from the stock offering at some $400 million, assuming the greenshoe option is not exercised, and said the proceeds would be used to take out all of the 5% notes. It said in the 424B filing that If the over-allotment option were to be exercised, net proceeds could total as much as $459.5 million. It said that the additional remaining proceeds would be used for general corporate purposes, including acquisitions.

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