Rayonier Inc. (NYSE:RYN) Q3 2023 Earnings Call Transcript

Dave Nunes: Yes. So keep in mind that a lot of this design is really not necessarily around the existing debt portfolio. During COVID, we restructured almost all of our debt portfolio, extending the maturity and lowering the cost and essentially other than this one tranche of floating, it was all hedged. And so we feel like we have a very attractive cost of debt today. The issue is as that debt matures and we have to refinance it if we are still in a higher longer interest rate environment, it will substantially change the character of funding that debt. And so what we’re trying to do by this measure is get out ahead of that and really prepare for that and have that flexibility, and that’s part of why we plan to do this over 18 months. We do not have a gun to our head. We’re simply trying to do this in a very thoughtful and deliberate way over that time period.

Mark McHugh: And Buck, I’d just kind of add to that. As we said in the prepared remarks, we expect to execute this plan in a way that will be CAD accretive on a per share basis. And if you just look at the assets that we just sold in this Oregon transaction and the EBITDA that we’ve generated over the last three years from that asset. It’s very much in line with what we’re seeing in private market valuations that those asset level yields can be as low as 2%, 2.5%, 3%. And so as we’re looking to execute this disposition program, like we said, we’re going to be focusing on concentrating capital in markets that have the strongest cash flow attributes and really looking to divest of markets that have weaker cash flow attributes. And so we do believe that this will be accretive to CAD per share as we move through this program.

Buck Horne: All right, guys. Thanks. Good luck.

Mark McHugh: Thanks Buck.

Operator: And that was our final question for today.

Collin Mings: This is Collin Mings. I’d like to thank everybody for joining us. Please contact us with any follow-up questions.

Operator: Thank you all for your participation on today’s conference call. At this time, all parties may disconnect.