Allied Waste $3.45 billion credit facility to launch Thursday

By Sara Rosenberg

New York, Feb. 22 - Allied Waste Industries Inc. is scheduled to hold a bank meeting on Thursday to launch its proposed $3.45 billion credit facility, according to a market source. JPMorgan and Citigroup are the lead banks on the deal, with JPMorgan the left lead.

The facility consists of a $1.55 billion five-year revolver, a $1.45 billion seven-year term loan B talked at Libor plus 225 to 250 basis points and a $450 million institutional letter-of-credit facility talked at Libor plus 225 to 250 basis points, the source said.

Basically with the new facility, the Scottsdale, Ariz., waste services company is increasing its existing revolver from $1.5 billion to enhance liquidity and will also be downsizing its term loan by more than $100 million.

Allied Waste has already received commitments in excess of the $1.55 billion revolver, according to a company news release.

Proceeds from the new credit facility, along with proceeds from a proposed $100 million common stock issuance, $500 million three-year mandatory convertible preferred stock issuance and $600 million 10-year senior notes issuance, will be used to repay the remaining $195 million of 10% senior subordinated notes due 2009, repay $125 million of 9.25% senior notes due 2012, repay the $600 million 7.625% senior notes due January 2006, repay the $70 million 7.875% senior notes due March 2005 and fully repay amounts outstanding under the existing credit facility.

"We are pleased to announce these plans to improve Allied's capital structure," said Pete Hathaway, executive vice president and chief financial officer, in the release. "These steps are being taken to increase liquidity and enhance covenant flexibility, reduce leverage, extend debt maturities and lower interest costs. By eliminating significant debt maturities over the next three years, these financing activities allow us to execute our operating strategy including continued reinvestment in our business while maintaining a strong financial base."

Proposed covenants based on projections should give the company about $200 million of EBITDA cushion on its most restrictive covenant in the near term.

© 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.