Covanta launches $1.44 billion of term loans at Libor plus 275 bps

By Sara Rosenberg

New York, Nov. 5 – Covanta Holding Corp. launched on Friday its $1.335 billion seven-year sustainability linked term loan B and $100 million seven-year sustainability linked term loan C with price talk of Libor plus 275 basis points with a 0.5% Libor floor and an original issue discount of 99.5, according to a market source.

The term loans have a 12.5 bps coupon increase for each of the two KPIs not met by the observation date of Dec. 31, 2025, and 101 soft call protection for six months.

Security is a perfected first priority pledge of 100% of the equity interests of parent and of each material direct, wholly owned restricted subsidiary of parent and of each subsidiary guarantor, and a perfected first priority interest in all tangible and intangible property of parent and each subsidiary guarantor, including equipment.

Barclays is the left bookrunner on the deal and the administrative agent.

Commitments are due at noon ET on Nov. 16, the source added.

Proceeds will be used to help fund the buyout of the company by EQT Infrastructure for $20.25 per share and refinance existing debt.

Closing is expected in the fourth quarter, subject to Covanta shareholder approval and customary government approvals.

Covanta is a Morristown, N.J.-based provider of sustainable waste and energy solutions.

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