Moody's may cut Waste Management

Moody's Investors Service said it placed its Baa3 senior unsecured rating of Waste Management, Inc. on review for possible downgrade following Waste Management's July 14 announcement of its unsolicited offer to acquire all of the outstanding common stock of Republic Services, Inc. (Baa1, on review for possible downgrade) for cash of $34.00 per share.

The Waste Management offer follows the June 23 announcement by Republic and Allied Waste Industries (corporate family of B1, on review for possible upgrade) of their intent to complete a stock-for stock merger by the end of 2008, the agency noted.

"The proposed transaction would require significant debt financing to complete and would likely result in credit metrics at Waste Management that are more consistent with a speculative-grade rating," said Moody's analyst Jonathan Root.

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