Ownership of New Zealand Joint Venture Expected to Increase to
Approximately 77%
JACKSONVILLE, Fla.--(BUSINESS WIRE)--Aug. 5, 2015--
Rayonier Inc. (NYSE: RYN) today announced that it has entered into a
credit agreement with CoBank, ACB, as administrative agent, and a
syndicate of Farm Credit institutions and other commercial banks to
provide $550 million of new credit facilities, including a five-year
$200 million revolving credit facility and a nine-year $350 million term
loan facility. The new credit facilities will be used to refinance the
company’s existing revolving credit facility and senior exchangeable
notes (due in August 2015), as well as fund an anticipated capital
infusion into the company’s New Zealand joint venture (the “Matariki JV”
or the “JV”) for repayment of JV indebtedness. As an eligible Farm
Credit System loan, the term loan facility will allow Rayonier to
receive annual patronage payments, which should lower the company’s net
effective interest cost.
The company has entered into an interest rate swap transaction to fix
the cost of the term loan facility over its nine-year term. Based on the
swap rate, the company’s current leverage ratio and the pricing grid,
the all-in fixed-rate cost of the term loan facility (net of estimated
patronage payments) is expected to be approximately 3.3% and the
floating-rate cost of the revolving credit facility will be LIBOR +
1.25%.
The company intends to use approximately $160 million of proceeds from
the term loan facility to fund a capital infusion into the Matariki JV,
which the JV will in turn use for repayment of all outstanding amounts
under its existing NZ$235 million credit facility plus NZ$7 million of
related fees and expenses (assuming an exchange rate of US$0.66 per
NZ$1.00). Since Rayonier is providing 100% of this capital infusion, its
ownership in the JV will increase from 65% to approximately 77%, based
on an implied pro forma net asset value of NZ$706 million (which equates
to approximately NZ$85 million for the incremental 12% stake). The
investment into the Matariki JV is subject to certain closing
conditions, including New Zealand Overseas Investment Office approval
and the preparation of customary transaction documents, and is expected
to close by the end of the year. The company expects to realize
consolidated interest cost savings of approximately $5 million annually
as a result of the JV recapitalization (based on the 3.3% cost of the
new term loan facility versus the 6.5% cost of the existing JV debt).
The remaining proceeds of the term loan facility will be used to fund
repayment of the company’s 4.50% senior exchangeable notes maturing
August 2015 (approximately $131 million), to fund repayment of amounts
outstanding under the company’s existing revolving credit facility
(approximately $45 million), to pay transaction fees and expenses
(approximately $2 million), and for cash and general corporate purposes
(approximately $12 million). In order to provide timing flexibility with
respect to the Matariki JV recapitalization, the term loan facility
provides that proceeds can be drawn in up to two advances for up to
eight months post-closing. Pro forma for the transactions described
above, the company anticipates having the full $350 million outstanding
under the term loan facility and nothing outstanding under the revolving
credit facility.
David Nunes, President and CEO of Rayonier, said: “These new credit
facilities and the recapitalization of our New Zealand joint venture
will simplify our capital structure, provide material interest costs
savings, increase our ownership position in a strategic asset, and
enhance our strategic flexibility going forward. We believe that the JV
recapitalization transaction represents an attractive capital allocation
alternative for Rayonier and is being made at an opportune time based on
the long-term outlook for the business, the enhanced strategic
flexibility that it provides, and the currently favorable NZ$/US$
exchange rate.”
The credit facilities are more fully described in a current report on
Form 8-K filed today with the Securities and Exchange Commission.
About Rayonier
Rayonier is a leading timberland real estate investment trust with
assets located in some of the most productive softwood timber growing
regions in the U.S. and New Zealand. As of June 30, 2015, Rayonier
owned, leased or managed approximately 2.7 million acres of timberlands
located in the U.S. South (1.9 million acres), U.S. Pacific Northwest
(373,000 acres) and New Zealand (444,000 acres). More information is
available at www.rayonier.com.
Forward-Looking Statements
This press release contains forward-looking statements, as defined by
the Private Securities Litigation Reform Act of 1995 and other federal
securities laws, related to the company’s inventories and harvest
capacity, which involve, among other things, uncertainties inherent in
business, inventory estimation and harvest scheduling. These
forward-looking statements are identified by the use of words such as
“may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,”
“project,” “anticipate” and other similar language. However, the absence
of these or similar words or expressions does not mean that a statement
is not forward-looking. While management believes that these
forward-looking statements are reasonable when made, forward-looking
statements are not guarantees of future performance or events and undue
reliance should not be placed on these statements. The reader is
cautioned not to rely on these forward-looking statements. If underlying
assumptions prove inaccurate or known or unknown risks or uncertainties
materialize, actual results could be vary materially from the
expectations and projections of Rayonier. Risks and uncertainties
include anticipated financial outcomes, business and market conditions,
outlook, expected dividend rate and the implementation of the company’s
business strategies and other similar outcomes relating to the company’s
future events, developments or financial or operational performance or
results. For additional factors that could impact future results, please
see Item 1A — Risk Factors in the company’s most recent Annual Report on
Form 10-K and similar discussions included in other reports that we
subsequently file with the Securities and Exchange Commission (the
“SEC”). Forward-looking statements are only as of the date they are
made, and the Company undertakes no duty to update its forward- looking
statements except as required by law. You are advised, however, to
review any further disclosures we make on related subjects in our
subsequent reports filed with the SEC.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150805006618/en/
Source: Rayonier Inc.
Rayonier Inc.
Investors
Mark McHugh, 904-357-3757
or
Media
Roseann
Wentworth, 904-357-9185
roseann.wentworth@rayonier.com