Rayonier inks $640 million term credit facility due 2019 via Cobank

By Toni Weeks

San Diego, Dec. 19 - Rayonier Inc. and subsidiaries Rayonier TRS Holdings Inc. and Rayonier Operating Co. LLC arranged a $640 million senior unsecured term credit facility on Dec. 17 with Cobank, ACB as administrative agent, bookrunner and joint lead arranger, according to an 8-K filed Wednesday with the Securities and Exchange Commission. Farm Credit East, ACA is also a joint lead arranger.

The facility matures Dec. 17, 2019.

Borrowings bear initially bear interest at Libor plus 150 basis points. The margin may vary from 150 bps to 250 bps based on the company's credit rating.

According to the filing, Rayonier expects to receive annual patronage refunds under the term credit agreement, effectively reducing the interest rate to Libor plus 100 bps. Patronage refunds are profit distributions made by a cooperative to its member-users based on the quantity or value of business done with the member-user.

The agreement has a delayed-draw feature, which allows the full amount to be borrowed in a maximum of five advances taken through Dec. 17, 2017.

At closing, Rayonier TRS borrowed $300 million under the facility and used the proceeds to pay down its revolver credit agreement that was arranged in 2011.

The new agreement contains various provisions and covenants customary to credit agreements arranged by borrowers with investment-grade debt ratings, the filing noted. The provisions and covenants are substantially identical to those of the company's revolver.

Rayonier is a Jacksonville, Fla.-based forest products company.

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