Plum Creek Timberlands, L.P. – the operating partnership entity of Plum Creek Timber Company, Inc. (PCL), a real estate investment trust (:REIT), has recently priced an underwritten public offering of $325 million worth of 3.25% senior unsecured notes. The notes are scheduled to mature in March 2023 to yield 3.34% to maturity.
The net proceeds from the offering are expected to be utilized by the operating partnership to repay notes maturing in 2013. The operating partnership intends to invest a major part of the proceeds in marketable securities or short term investments. The balance will be utilized in repayments of outstanding borrowings under its revolving credit facility.
At the end of third quarter 2012, Plum Creek had cash and cash equivalents of $320 million and total long-term debt of $1.6 billion.
Plum Creek owns one of the largest and most geographically diversified private timberland in the U.S. The company produces lumber, plywood and medium density fiberboard in its wood products manufacturing facilities.
Plum Creek’s diversified timber and land base provides excellent operational flexibility to respond to changing market conditions amid challenging macroeconomic environment. In addition, the upsurge in demographic trends driving housing markets and demand for real estate properties across the nation provides a strong economic backdrop for the company and an opportunity to demonstrate solid financial performance in the future.
Plum Creek currently retains a Zacks #5 Rank, which translates into a short-term Strong Sell rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Weyerhaeuser Co. (WY) holds a Zacks #2 Rank which translates into a short-term Buy rating.
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