Moody’s assigns GFL CFR B2, notes B3

Moody's Investors Service said it assigned GFL Environmental Inc. a B2 corporate family rating, B2-PD probability of default rating and a B3 rating to its proposed senior unsecured notes.

The outlook is stable.

Net proceeds from the notes issue will be used to repay existing debt, tender for a portion of the company's existing C$300 million unsecured notes and to fund potential acquisitions.

Moody’s said the B2 corporate family rating is driven by risks with its ongoing growth by acquisition strategy as well as its diversified business model and good market position in the stable but low-growth Canadian non-hazardous waste industry.

While growth has come from acquisitions, which the agency expects will continue, the rating considers that disciplined execution and EBITDA expansion supported by synergy benefits and good cost control will likely enable leverage to be sustained around 5 times over time (currently 4.8 times pro forma for recent acquisitions).

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