Rayonier Advanced creditor Chatham urges refinancing of 2024 notes

By Wendy Van Sickle

Columbus, Ohio, May 24 – Rayonier Advanced Materials Inc. creditor Chatham Asset Management, LLC criticized the company’s “lack of urgency” in addressing its debt maturities in a statement on Wednesday.

Specifically, Chatham, which said it is Rayonier’s largest creditor, said the issuer has not done enough to address its 5½% senior notes due June 1, 2024 and its 7 5/8% senior secured notes due Jan. 15, 2026.

“Following an extended period of inaction and unsuccessful refinancing attempt earlier this year, we are deeply dismayed by [Rayonier’s] continued lack of urgency in addressing its debt maturities as the 2024 notes become current next Thursday, June 1. ... Rather than shopping around for what it deems as ‘acceptable terms,’ the board’s fiduciary duty should be to accept the prevailing market rate for its debt, regardless of whether this represents a concession to the current trading level of the 2026 notes, which recently traded at a year-to-date low of $87.50, or a 13.4% yield to maturity,” Chatham said in the statement.

The current trading levels of Rayonier’s 2026 notes are significantly lower than they were in both January 2023 and March 2022, at which time, according to Chatham, the board refused a proposed refinancing transaction.

“The price of [Rayonier’s] common equity has also declined since March 2022, which we believe is due to the overhang of a substantial near-term debt maturity, the absence of a concrete financing strategy and poor capital allocation by management,” Chatham continued. “We strongly urge [Rayonier] to engage in proactive dialogue with its financial adviser and auditors about a rational solution to its debt, as the company faces a perilously tight maturity window for a below investment-grade entity, and we fear going concern language in the company’s next financials. [Rayonier] is a solvent, eminently financeable company, and the obvious remedy is a prompt financing package.”

Rayonier makes cellulose-based technologies and is based in Jacksonville, Fla.

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