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Rayonier cuts pricing on five-year revolver, lifts borrowing capacity
By Marisa Wong
Madison, Wis., Oct. 17 - Rayonier Inc. amended its five-year revolving credit agreement dated April 21, 2011 with Credit Suisse AG as administrative agent to reduce pricing to Libor plus 97.5 basis points from Libor plus 105 bps, according to an 8-K filing with the Securities and Exchange Commission.
The amendment, completed on Oct. 11, also lowers the facility fee to 15 bps from 20 bps. The facility fee, like the Libor spread, is based on the company's credit rating.
The filing said that the amended and restated credit agreement provides additional borrowing capacity by revising the leverage ratio to permit Rayonier and its subsidiaries' debt up to 65% of consolidated net worth, plus the amount of consolidated debt. Previously, debt was limited to four times EBITDA.
In addition, the company can now transfer assets to any subsidiary, and any subsidiaries can now transfer assets to other subsidiaries or to the parent company.
An additional covenant was added to limit debt at subsidiaries - excluding Rayonier Operating Co. LLC and Rayonier TRS Holdings Inc., which are also borrowers under the credit agreement - to 15% of consolidated net tangible assets.
Also, the restated agreement removed Rayonier Forest Resources, LP as a borrower and eliminated specific negative covenants relating to Rayonier Forest.
The filing noted that the amended agreement eliminated all requirements for subsidiary guarantors, other than cross-guarantees of the borrowers. As a result, these guarantors were also released from Rayonier's 3.75% senior notes due 2022 through a second supplemental indenture dated Oct. 11. The remaining guarantors of the notes are Rayonier TRS Holdings and Rayonier Operating Co.
Rayonier is a Jacksonville, Fla.-based forest products company.
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