Rayonier restates $930 million credit agreement in four tranches

By Wendy Van Sickle

Columbus, Ohio, Aug. 18 – Rayonier Advanced Materials Inc. restated its amended and restated credit agreement dated June 24, 2014 on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

The restated agreement will become effective upon closing of the company’s acquisition of Tembec Inc.

The amended and restated credit agreement will provide for senior secured credit facilities, including: a $100 million revolving credit facility; a $150 million dollar-equivalent revolver to be denominated in U.S. or Canadian dollars and euros; a $230 million term A-1 loan; and a $450 million term A-2 loan.

Rayonier A.M. Products Inc. will be the borrower under the revolving facilities and term A-1 loan, and Rayonier Performance Fibers, LLC will be the borrower under the term A-2 loan.

The $100 million revolver has a $40 million letter-of-credit sublimit and a $25 million sublimit for swingline loans. The $150 million dollar-equivalent revolver has a $60 million sublimit for letters of credit.

Loans will bear interest at Libor plus 200 basis points to 275 bps, depending on consolidated total net leverage.

BofA Merrill Lynch, CoBank, ACB, Wells Fargo Securities, LLC, JPMorgan Chase Bank, NA and SunTrust Robinson Humphrey, Inc. are the joint lead arrangers and bookrunners.

CoBank, Wells Fargo, JPMorgan and SunTrust are the co-syndication agents; PNC Bank, NA, TD Bank, NA and DNB Capital LLC the co-documentation agents; and Bank of America, NA the administrative agent.

Rayonier A.M. Products will use the term A-1 loan and up to $50 million under the revolvers to finance the acquisition of Tembec and for working capital and other general corporate purposes.

Rayonier Performance Fibers will use the term A-2 loan to finance or refinance its investments or those of some Rayonier Advanced subsidiaries.

The company will be required to maintain a consolidated first lien secured net leverage ratio of no greater than 3 times and an interest coverage ratio of no less than 3 times.

Rayonier is a Jacksonville, Fla.-based supplier of high purity cellulose. Tembec is a Montreal-based manufacturer of forest products.

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