Clean Harbors expects to close on $235 million credit facility on Aug. 30

By Sara Rosenberg

New York, Aug. 1 - Clean Harbors Inc. expects to close on a new $235 million credit facility on Aug. 30, according to a company spokesman.

The facility consists of a $100 million three-year revolver with an interest rate of Libor plus 300 basis points, a $100 million three-year non-amortizing senior term loan with an interest rate of Libor plus 725 basis points and a $35 million non-amortizing five-year subordinated term loan with an annual interest rate of 22%, the spokesman said.

The 425 basis point differential between the interest rates of the revolver compared to the senior term loan is due to varying security packages. "The revolver is primarily secured by receivables. It's the most liquid collateral," the spokesman explained. The term loan is secured by a less liquid collateral package that includes fixed and certain other assets and a second priority lien on accounts receivable.

Congress Financial is the lender on the revolver, the spokesman said. Lenders for the other facilities are not currently being disclosed.

Proceeds, combined with proceeds from $25 million of convertible preferred stock with a 6% dividend, will be used to pay off existing debt and to help fund the pending acquisition of Safety-Kleen Corp.'s Chemical Services Division, which is expected to close in late August.

The company has chosen to use bank debt to finance the acquisition because of "a lack of audit financial statements" for the Safety-Kleen division, the spokesman said. "We couldn't register the bonds and so forth, so it took us out of the market."

Standard & Poor's rates the new loan BB.

Clean Harbors is a Braintree, Mass. provider of environmental and waste management services

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.