S&P: GFL unchanged by add-on

Standard & Poor’s said it affirmed the rating on GFL Environmental Inc.’s 9 7/8% senior unsecured notes due 2021 at B with a recovery rating of 4 following the $150 million add-on to the existing $300 million issuance.

The 4 recovery rating indicates 30% to 50% expected default recovery.

The proceeds will be used to pay its revolver borrowings, which were used to finance small scale acquisitions in early 2016, S&P said.

The long-term corporate credit rating on GFL also was affirmed B with a stable outlook.

Even though the company exited 2015 with a debt-to-EBITDA ratio of about 7.5x, S&P said it placed greater emphasis on pro forma ratios due to the company’s highly acquisitive growth strategy, which is funded mostly by debt.

The stable outlook reflects the company’s good growth prospects in a stable industry, the agency said, balanced by its highly leveraged financial risk profile and aggressive acquisition strategy.

© 2015 Prospect News.
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