S&P rates Waste Management notes BBB

Standard & Poor's said it assigned a BBB rating to Waste Management Inc.'s $500 million senior notes due 2016 and affirmed its BBB corporate credit rating.

The outlook remains stable.

Proceeds will be used to repay outstanding borrowings under the company's $2 billion revolving credit facility, which was about $100 million as of August, with the remaining proceeds to be used for general corporate purposes.

The company used its revolving credit facility to partially fund the $425 million acquisition of Oakleaf Global Holdings Inc. on July 28.

Ratings reflect the company's strong business risk profile, highlighted by its competitive market position, along with its significant financial risk profile, the agency said.

"We expect that the company will maintain good liquidity and will continue to adhere to moderate financial policies and balanced capital allocation from its sizable free cash flow," S&P analyst James Siahaan said in a statement.

"During the last recession, Waste Management was able to raise prices to partially offset the volume declines related to the loss of low-margin customers and the slowdown in residential construction," Siahaan said.

Pricing has remained fairly stable during the past few quarters but the rate of improvement in the economy has been slow, and conditions could deteriorate again, the agency noted.

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