Weyerhaeuser Co.'s Proposed Senior Unsecured Notes Rated 'BBB'

FARMERS BRANCH (S&P Global Ratings) March 26, 2020--S&P Global Ratings today assigned its 'BBB' issue-level rating to Weyerhaeuser Co.'s proposed senior unsecured notes. The Seattle-based timber REIT will draw from its shelf registration statement filed June 7, 2018.
Weyerhaeuser intends to use a substantial portion of the net proceeds from this offering to refinance existing indebtedness, which may take the form of redemptions, repayments at maturity, repurchases, or other transactions, including one or more of the following:
  • To redeem all or a portion of its 4.7% notes due 2021, of which $569 million aggregate principal amount is outstanding; and
  • To repay at maturity 9% debentures due 2021, of which $150 million aggregate principal amount is outstanding.
We therefore view the proposed transaction as largely leverage- and credit-neutral.
Weyerhaeuser (BBB/Negative/A-2) owns approximately 11 million acres of timberlands in the U.S. and manages an additional 14 million acres under long term licenses in Canada. The company derives much of its income from timber sales, wood product manufacturing, and sales of timberlands that exhibit higher value. Our ratings incorporate our view of solid asset protection driven by ownership of these salable timberlands, with a market value of more than $25 billion, versus funded debt of about $6.4 billion as of Dec. 31, 2019.
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