DEBT

As of June 30, 2014, the 2015 Notes were exchangeable at the option of the holders for the calendar quarter ended September 30, 2014. According to the indenture, in order for the notes to become exchangeable, the Company’s stock price must exceed 130 percent of the exchange price for 20 trading days during a period of 30 consecutive trading days as of the last day of the quarter. During the nine months ended September 30, 2014, the note holders did not elect to exercise the exchange option. Based upon the average stock price for the 30 trading days ended September 30, 2014, these notes again became exchangeable at the option of the holder for the calendar quarter ending December 31, 2014. The notes mature in September of 2015 and are classified as current maturities of long-term debt as of September 30, 2014.

As part of the spin-off of the Performance Fibers business, Rayonier Advanced Materials, while a subsidiary of Rayonier, incurred $950 million of new debt. Rayonier Advanced Materials distributed $906 million from the proceeds of this new debt to the Company prior to the spin-off, including $75 million restricted to shareholder dividend payments which were made during third quarter 2014. Rayonier used the remainder of the distribution, as well as available cash, to make repayments of $280 million on its unsecured revolving credit facility, $500 million on its term credit agreement and $112.5 million on its installment note due 2014. Additionally, during the third quarter of 2014 the Company prepaid $10.5 million of principal on the mortgage notes due 2017, the maximum amount allowable without penalty.

Net repayments of $80 million were made in the first quarter of 2014 on the revolving credit facility. In connection with the spin-off, the revolving credit facility and term credit agreement were amended to reduce the Company’s borrowing capacity and related commitment fees effective July 7, 2014. The revolving credit facility capacity was reduced from $450 million to $200 million and the term credit agreement was reduced from $640 million of available capacity to $100 million. The capacity reductions also resulted in the write-off of $1.7 million of capitalized debt costs. At September 30, 2014, the Company had available borrowings of $198 million under the revolving credit facility and additional draws available of $100 million under the term credit agreement.

Through the nine months ended September 30, 2014, the New Zealand JV paid $1.2 million on its shareholder loan held with the non-controlling interest party and made net draws on its working capital facility of $1.3 million. Favorable exchange rates resulted in a $11.4 million decrease to the New Zealand JV’s debt on a U.S. dollar basis. There were no other significant changes to the Company’s outstanding debt as reported in Note 13 — Debt in the Company’s Amended Form 10-K.

Rayonier’s debt consisted of the following at September 30, 2014:



	September 30, 2014
Senior Notes due 2022 at a fixed interest rate of 3.75%	$	325,000
Senior Exchangeable Notes due 2015 at a fixed interest rate of 4.50% (a)	129,199
Mortgage notes due 2017 at fixed interest rates of 4.35% (b)	53,926
Solid waste bond due 2020 at a variable interest rate of 1.3% at September 30, 2014	15,000
New Zealand JV Revolving Credit Facility due 2016 at a variable interest rate of 4.53% at September 30, 2014	183,394
New Zealand JV Working Capital Facility due 2014 at a variable interest rate of 4.69% at September 30, 2014	1,287
New Zealand JV noncontrolling interest shareholder loan at 0% interest rate	27,842
Total debt	735,648
Less: Current maturities of long-term debt	(130,486		)
Long-term debt	$	605,162


(a)	The Senior Exchangeable Notes maturing in 2015 were discounted by $1.8 million as of September 30, 2014. Upon maturity the liability will be $131 million.


(b)	The mortgage notes due in 2017 were recorded at a premium of $1.4 million as of September 30, 2014. Upon maturity, the liability will be $52.5 million.