Bank of America has committed to provide up to $260 million in financing for Plum Creek Timber Co.'s purchase of timberland from Champion International Corp.

The deal is one of a spate of financings this year stemming from the sale of assets in strategic corporate divestitures.

Plum Creek, a Seattle-based forest products company, is buying 867,000 acres of Montana timberland for $260 million.

Terms of the loan have not been finalized, and the company will probably not finance the acquisition completely through debt, said Rick Holley, chief financial officer of Plum Creek.

Mr. Holley said Bank of America will probably bring a small number of other banks into the financing.

Plum Creek has $35 million in working capital lines, which are undrawn, he said.

The company has no publicly rated debt, but it has $310 million in privately placed debt due in 2007 that is rated "2" by the National Association of Insurance Commissioners. A "2" rating on private debt is equivalent to a low investment-grade public debt rating of BBB, Mr. Holley said.

The company will probably maintain that rating after the purchase is financed, he said.

Greater Flexibility

Plum Creek opted for a bank loan over privately placed debt because revolving bank credit gives it more flexibility in paying down debt without penalty, he said.

The company expects the financing to be a revolving credit with a maturity of eight to 10 years.

In another acquisition-related loan, Morgan Guaranty Trust Co. underwrote a $425 million loan to finance Louisiana Land & Exploration Corp.'s $353.7 purchase of Nerco Oil & Gas Inc., according to a market source.

In the next few weeks, Morgan will lead a general syndication of a larger loan for Louisiana Land, the source said.

Nerco is a subsidiary of RTZ Corp., a British mining company, which is selling the company because it does not fit its focus on coal production.

Officials at Louisiana Land and Morgan declined to comment.

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