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Investor Contact: Carl Kraus 904-357-9158

JACKSONVILLE, Fla. - October 11, 2007 - Rayonier (NYSE:RYN) today announced pricing of the offering by its wholly owned subsidiary, Rayonier TRS Holdings Inc. ("TRS"), of $250 million aggregate principal amount of senior exchangeable notes due 2012 through an offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes will bear interest at a rate of 3.75% per year. The notes will be fully and unconditionally guaranteed by Rayonier Inc. ("Rayonier"). The sale of the notes to the initial purchasers is expected to close on October 16, 2007. The notes will be exchangeable into shares of common stock of Rayonier under certain circumstances at an initial conversion rate of 18.2433 shares per $1,000 principal amount of notes, which is equal to a conversion price of approximately $54.81 per share. The initial conversion price represents a premium of approximately 22% relative to the last reported sale price of Rayonie r's common shares on the New York Stock Exchange on October 10, 2007. Upon exchange, holders of notes will receive cash up to the principal amount, and any excess exchange value will be delivered in Rayonier's common shares. TRS also granted the initial purchasers a 13-day option to purchase up to an additional $50 million aggregate principal amount of notes.

In connection with this transaction, TRS and Rayonier will enter into separate exchangeable note hedge and warrant sale transactions with financial institutions. These transactions will generally have the effect of increasing the exchange price of the exchangeable notes to approximately $62.90 per share of Rayonier's common stock, representing a 40% premium based on the last reported sale price of $44.93 per share on October 10, 2007. The warrant and hedge transactions are intended to limit potential dilution to Rayonier shareholders from the possible exchange of the notes.

TRS will use a portion of the net proceeds of the offering to repay in full indebtedness outstanding under its revolving credit facility, to fund the cost of the exchangeable note hedge transactions, and to make a distribution to Rayonier in one or more dividend transactions. Rayonier will then apply some or all of the proceeds from the dividend distribution it will receive from TRS, together with the proceeds of the warrant sale transactions Rayonier entered into and cash on hand, to repay a $112.5 million note due December 31, 2007 to an unrelated third party.

In connection with establishing their initial hedge of the exchangeable note hedge and warrant transactions, the participating financial institutions or affiliates thereof expect to enter into various derivative transactions with respect to Rayonier's common shares and/or purchase Rayonier's common shares in secondary market transactions concurrently with, or shortly after, the pricing of the notes. In addition, these financial institutions or affiliates thereof may modify their hedge positions by entering into or unwinding various derivative transactions and/or purchasing or selling Rayonier's common shares in secondary market transactions prior to maturity of the notes (and are likely to do so during any exchange reference period related to any exchange of the notes). These activities could have the effect of increasing, or preventing a decline in, the price of Rayonier's common shares.

These securities are not registered under the Securities Act of 1933 or any state securities laws, and unless so registered, may not be offered or sold except pursuant to an exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws.

Rayonier is a leading international forest products company with three core businesses: Timber, Real Estate and Performance Fibers. It owns, leases or manages 2.6 million acres of timber and land in the U.S. and New Zealand. Rayonier's holdings include approximately 200,000 acres with residential and commercial development potential along the fast-growing Interstate 95 corridor between Savannah, Georgia, and Daytona Beach, Florida. Its Performance Fibers business is the world's leading producer of high-value specialty cellulose fibers. Approximately 40% of Rayonier's sales are outside the U.S. to customers in more than 50 countries. Rayonier is structured as a Real Estate Investment Trust ("REIT").

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