Rayonier Prices Private Placement of $150 Million Senior Exchangeable Notes
06 Agosto 2009 - 9:40PM
Business Wire
Rayonier (NYSE:RYN) today announced pricing of the offering by
its wholly owned subsidiary, Rayonier TRS Holdings Inc. ("TRS"), of
$150 million aggregate principal amount of senior exchangeable
notes due 2015 through an offering to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”). The notes will bear interest at a
rate of 4.50% per year. The notes will be fully and unconditionally
guaranteed by Rayonier Inc. ("Rayonier"). The sale of the notes to
the initial purchasers is expected to close on August 12, 2009. The
notes will be exchangeable into shares of common stock of Rayonier
under certain circumstances based on an initial exchange rate of
19.9055 shares per $1,000 principal amount of notes, which is equal
to an exchange price of approximately $50.24 per share. The initial
exchange price represents a premium of approximately 22.5% relative
to the last reported sale price of Rayonier's common shares on the
New York Stock Exchange on August 6, 2009. Upon exchange, holders
of notes will receive cash up to the principal amount, and any
excess exchange value will be delivered, at Rayonier's election, in
cash or Rayonier's common shares. TRS also granted the initial
purchasers a 13-day option to purchase up to an additional $22.5
million aggregate principal amount of notes.
TRS will use a portion of the net proceeds of the offering to
repay a portion of the indebtedness outstanding under its credit
facility, repay a portion of an installment note due December 31,
2009 and make a distribution, in one or more dividend transactions,
to Rayonier. TRS also intends to use a portion of the net proceeds
from the offering for the cost of the exchangeable note hedge
transactions that TRS entered into with affiliates of the initial
purchasers of the notes. The exchangeable note hedge transactions
are intended to limit exposure to potential dilution to Rayonier
shareholders from noteholders who could exchange the notes for
Rayonier common shares.
Rayonier intends to apply the proceeds from the dividend
distribution it will receive from TRS, together with the proceeds
of the warrant sale transactions Rayonier entered into (as set
forth below) and cash on hand, to repay the remaining amount of the
installment note due December 31, 2009 to an unrelated third party.
In connection with this transaction, Rayonier entered into separate
warrant sale transactions covering 2,985,825 shares, which may be
increased if the initial purchasers exercise their option to
purchase additional notes, of Rayonier’s common stock with
financial institutions that entered into the exchangeable note
hedge transactions. The exchangeable note hedge transactions will
generally reduce the potential dilution upon exchange of the notes
in the event that the market value per share of Rayonier's common
stock is greater than the exchange price of the notes. However, the
warrant transactions will separately have a dilutive effective on
Rayonier's earnings per share if the market value per share of
Rayonier's common stock exceeds $60.
In connection with establishing their initial hedge of the
exchangeable note hedge and warrant transactions, such financial
institutions or affiliates thereof expect to enter into various
derivative transactions with respect to Rayonier’s common shares
and/or purchase Rayonier’s common shares in secondary market
transactions concurrently with, or shortly after, the pricing of
the notes. In addition, these financial institutions or affiliates
thereof may modify their hedge positions by entering into or
unwinding various derivative transactions and/or purchasing or
selling Rayonier’s common shares in secondary market transactions
prior to maturity of the notes (and are likely to do so during any
exchange reference period related to any exchange of the notes).
These activities could have the effect of increasing or preventing
a decline in the price of Rayonier’s common shares.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
These securities will not be registered under the Securities Act
or any state securities laws, and unless so registered, may not be
offered or sold except pursuant to an exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
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