Fitch raises Waste Connections

Fitch Ratings said it raised its ratings for Waste Connections, Inc. (WCN) long-term issuer default rating and senior unsecured ratings to A- from BBB+. The agency also upgraded senior unsecured credit facilities and notes to A- from BBB+.

“The upgrade reflects the waste industry and WCN's durable through-the-cycle business and cash flow profiles, as well as the demonstrated dedication to clear, consistent capital allocation and financial policies, representative of an A- rating.

“These include the highly competitive barriers associated with its difficult-to-reproduce landfill network, consistent and regulatorily mandated need for solid waste disposal across substantially all sectors of the economy that limits volumetric risk, disciplined pricing behavior that preserves margins and FCF exhibited through business cycles, and diversified geographic footprint that moderates the impact of demographic shifts,” Fitch said in a press release.

The agency said it forecasts WCN’s EBITDA leverage of about 2.8x at year end 2023, and that leverage remains in the high 2.5x-3x range going forward.

The outlook is stable.

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