S&P puts GFL on positive watch

S&P said it placed all its ratings for GFL Environmental Inc. on CreditWatch with positive implications. The company plans to raise about C$2.9 billion, including about C$2 billion of equity from an IPO and about C$900 million from issuing tangible equity units.

“The CreditWatch placement reflects our view that the planned IPO is likely to close within the coming weeks and contribute to a material reduction in GFL's high debt load with adjusted debt-to-EBITDA approaching our 6x upgrade trigger in 2020. We anticipate that the lower debt levels following the IPO should also contribute to positive free operating cash flow (FOCF) and interest coverage ratios considerably above 2x,” said S&P in a press release.

S&P plans to resolve the CreditWatch after the IPO closes, which the agency expects well within the next 90 days.

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