Sino-Forest talks $300 million five-year convertible senior notes at 4.75%-5.25%, up 32.5%-37.5%

By Kenneth Lim

Boston, July 17 - Sino-Forest Corp. planned to price $300 million of five-year convertible senior notes on the international markets on Thursday after the market closed, talked at a coupon of 4.75% to 5.25% and an initial conversion premium of 32.5% to 37.5%.

The notes were offered at par.

The company gave underwriters Merrill Lynch and Credit Suisse an over-allotment option for an additional $45 million in the Rule 144A and Regulation S offering.

The convertibles will be non-callable and may not be put.

There will be full takeover and dividend protection.

Sino-Forest, a Mississauga, Ont.-based commercial forestry operator in China, said it will use about $230 million of the proceeds as initial capital to acquire plantation forests in the Fujian Province. It will use about $15 million to lease land for planting jatropha trees, and any remaining proceeds will be used for working capital.

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