Weyerhaeuser begins tender for $450 million floaters, Dutch auction tender for $250 million 6¾% notes

By Susanna Moon

Chicago, Nov. 24 - Weyerhaeuser Co. said it began a cash tender offer to purchase up to $450 million principal amount of floating-rate notes due Sept. 24, 2009 and a Dutch auction tender offer for $250 million of 6¾% notes due March 15, 2012.

The tender offer will expire at 5 p.m. ET on Dec. 8. The Dutch auction offer will expire at midnight ET on Dec. 22.

The company will pay $970 for each $1,000 principal amount of the floaters.

In the Dutch auction tender offer, Weyerhaeuser will purchase up to the tender cap of its outstanding 6¾% notes.

Under the modified Dutch auction procedure, Weyerhaeuser will accept notes tendered in order of lowest to highest tender prices, in increments of $2.50, and will select the single lowest price per note to purchase the amount of securities equal to the tender cap.

The purchase price at which securities are tendered will be used to set the purchase price and proration.

Weyerhaeuser will pay the same purchase price for all notes tendered at or below the clearing price and accepted for purchase.

The purchase price includes an early tender premium of $20 per note tendered by Dec. 8.

If the notes tendered at or below the clearing price exceed the tender cap, Weyerhaeuser will accept all notes tendered at prices below the clearing price and, thereafter, notes tendered at the clearing spread on a prorated basis according to the principal amount of the securities.

The company said it will make appropriate adjustments downward to the nearest $1,000 principal amount to avoid purchases in principal amounts other than integral multiples of $1,000.

Weyerhaeuser also will pay accrued interest to the settlement date, which is expected to be Dec. 9 for the floaters and Dec. 23 for 6¾% notes.

Banc of America Securities LLC (888 292-0070 or collect 704 388-4603, attn. debt advisory services) and Citigroup Global Markets Inc. (800 558-3745 or collect 212 723-6106, attn. liability management group) are the lead dealer managers for the offers. J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc. and Goldman, Sachs & Co. are co-dealer managers for the offers.

Global Bondholder Services Corp. (866 804-2200 or collect 212 430-3774) is the depositary and information agent.

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