Fitch rates Waste Management notes BBB

Fitch Ratings said it assigned a BBB rating to Waste Management, Inc.'s senior unsecured note offering. The $600 million in new notes mature in June 2020, and proceeds are expected to be used to fund the repayment of its $600 million senior notes that mature on Aug. 1. The company's issuer default rating is BBB.

The outlook is stable.

The ratings reflect the waste services company's continued financial flexibility and free cash flow generation potential despite the recession-driven decline in collection and disposal volumes, Fitch said.

Industry waste volumes have declined materially over the past two years, but the company's core yield and EBITDA margin have held up as the industry has remained disciplined on pricing, the agency said.

Although the addition of the new notes will temporarily increase its leverage slightly until the August 2010 notes are repaid, Fitch said it expects the company's credit profile will remain consistent with its BBB ratings over at least the intermediate term.

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