Moody's may lower Rayonier

Moody's Investors Service said it placed the Ba3 corporate family rating, Ba3-PD probability of default rating and B1 senior unsecured notes on Rayonier AM Products Inc. under review for possible downgrade.

The review follows news that the company signed an agreement to acquire Tembec Industries Inc. for a total consideration of $800 million, Moody's said.

The review for downgrade was prompted by the possibility that Rayonier's leverage and interest coverage credit metrics will initially weaken following the acquisition of Tembec, the agency said.

Moody's said the review will focus on the anticipated operating and financial performance of the combined company and will assess the size, pace and allocations of realizable cost synergies.

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