Fitch hikes Republic Service

Fitch Ratings said it upgraded Republic Services, Inc. and Browning Ferris Industries, Inc.'s (collectively RSG) long-term issuer default rating and senior unsecured debt to A- from BBB+.

“The upgrade reflects the waste industry and RSG's durable through-the-cycle business and cash flow profiles, as well as the demonstrated dedication to clear, consistent capital allocation and financial policies, representative of an A- rating.

“These include the high competitive barriers associated with its highly difficult-to-reproduce landfill network, the consistent and regulatorily mandated need for solid waste disposal across substantially all sectors of the economy that limits volumetric risk, disciplined pricing behavior that preserves margins and FCF exhibited through business cycles, and diversified geographic footprint moderate the impact of demographic shifts,” the agency said in a statement.

Fitch said it projects RSG’s EBITDA leverage of about 3x at YE 2023, and that leverage hovers in the high 2x-3x range going forward.

The outlook is stable.

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