US Ecology enters into $500 million five-year revolver via Wells Fargo

By Tali Rackner

Minneapolis, April 20 – US Ecology, Inc. entered into a senior secured credit agreement on Tuesday with administrative agent Wells Fargo Bank, NA that provides for a $500 million five-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The facility includes a $75 million sublimit for standby letters of credit. It also provides for an up to $200 million incremental term loan and revolving loan facility.

The revolver matures on April 18, 2022.

Initial interest is equal to Libor plus 150 basis points with a 25 bps commitment fee. The spread over Libor ranges from 100 bps to 200, depending on the company’s total net leverage ratio. The commitment fee ranges from 17.5 bps to 35 bps, also based on leverage.

The credit agreement contains certain financial maintenance covenants requiring the company to maintain a maximum consolidated total net leverage ratio as of the last day of any fiscal quarter, beginning with the fiscal quarter ending June 30, of 3.5 times, subject to certain exceptions. US Ecology must also maintain a minimum consolidated interest coverage ratio as of the last day of any fiscal quarter, beginning with the fiscal quarter ending June 30, of 3 times. Upon the occurrence of an event of default, among other things, amounts outstanding under the new credit agreement may be accelerated and the commitments may be terminated.

Proceeds were used to repay and terminate the company’s existing credit agreement dated June 14, 2014. At termination, there were about $278.3 million of term loans and no revolving loans outstanding under that agreement.

Wells Fargo Securities, LLC and BofA Merrill Lynch acted as joint lead arrangers and joint bookrunners on the deal. Bank of America, NA acted as syndication agent and Bank of Montreal, PNC Bank, NA and U.S. Bank NA acted as co-documentation agents.

US Ecology is a Boise, Idaho-based provider of radioactive, hazardous, PCB and non-hazardous industrial waste management and recycling services.

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