S&P: Waste Connections unchanged

Standard & Poor's said that its ratings and outlook on Waste Connections Inc. (BBB-/stable) are not immediately affected by the company's announcement that it intends to issue 10 million shares of common stock.

Although the company indicated that one of the uses of the proceeds will be to repay a portion of the outstanding borrowings from its senior revolving credit facility, Waste Connections has not quantified how much debt it intends to repay or if the reduction represents a commitment to lower debt, S&P noted.

At this point, the agency said it does not believe that the company's announcement is indicative of a long-term commitment to adopt a more conservative financial policy and operate at a lower leverage level.

Rather, given the likelihood of substantial asset divestitures in the industry stemming from either a combination of Republic Services Inc. and Allied Waste Industries Inc., or an acquisition of Republic Services by Waste Management Inc., it is likely that Waste Connections would again increase its leverage in the future in order to acquire divested assets, the agency said.

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