By Devika Patel
Knoxville, Tenn., Nov. 6 – Waste Management, Inc. offered further details, including the call features, about a $2.5 billion sale of guaranteed fixed-rate senior notes (Baa1/A-/BBB+) that priced in four tranches on Thursday to strong demand and on the tight side of guidance, according to an FWP filed with the Securities and Exchange Commission.
A $500 million offering of 0.75% five-year notes priced at 99.829 to yield 0.785%, or a spread of Treasuries plus 45 basis points.
Price talk was in the Treasuries plus 50 bps area, plus or minus 5 bps.
A $500 million tranche of 1.15% notes due March 15, 2028 priced at 99.937 to yield 1.159%. The notes were sold with a Treasuries plus 60 bps spread.
Guidance was in the 65 bps over Treasuries area, plus or minus 5 bps.
Waste Management sold $1 billion of 1.5% notes due March 15, 2031 at 99.763 to yield 1.525%, or a 75 bps over Treasuries spread.
The notes were guided to price in the 80 bps spread area, plus or minus 5 bps.
A $500 million tranche of 2.5% 30-year notes priced at 99.998 to yield 2.548% and a Treasuries plus 100 bps spread.
Price guidance was in the Treasuries plus 105 bps area, plus or minus 5 bps.
Book orders totaled $19.8 billion with a final book demand of more than $14 billion.
Barclays, Mizuho Securities USA LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, Scotia Capital (USA) Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., MUFG, SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc. were the bookrunners.
The notes are fully guaranteed by the company’s subsidiary, Waste Management Holdings, Inc.
Proceeds will be used to repay all of the debt under the company’s $3 billion revolving credit facility, to redeem its $400 million of 4.6% senior notes due March 2021 and for general corporate purposes.
Waste Management is a Houston-based provider of water management environmental services.
| Issuer: | Waste Management, Inc.
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| Guarantor: | Waste Management Holdings, Inc.
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| Amount: | $2.5 billion
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| Description: | Senior notes
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| Bookrunners: | Barclays, Mizuho Securities USA LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, Scotia Capital (USA) Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., MUFG, SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc.
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| Co-managers: | Academy Securities, Inc., Loop Capital Markets LLC, MFR Securities, Inc., Mischler Financial Group, Inc., Siebert Williams Shank & Co., LLC and Stern Brothers & Co.
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| Trade date: | Nov. 5
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| Settlement date: | Nov. 17
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| Ratings: | Moody’s: Baa1
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| S&P: A-
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| Fitch: BBB+
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| Distribution: | SEC registered
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| Notes due 2025
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| Amount: | $500 million
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| Maturity: | Nov. 15, 2025
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| Coupon: | 0.75%
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| Price: | 99.829
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| Yield: | 0.785%
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| Spread: | Treasuries plus 45 bps
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| Call: | Make-whole call at Treasuries plus 7.5 bps until Oct. 15, 2025, then a par call
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| Change-of-control put: | 101%
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| Price guidance: | Treasuries plus 50 bps area, plus or minus 5 bps; initial talk at Treasuries plus 70 bps-75 bps area
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| Notes due 2028
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| Amount: | $500 million
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| Maturity: | March 15, 2028
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| Coupon: | 1.15%
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| Price: | 99.937
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| Yield: | 1.159%
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| Spread: | Treasuries plus 60 bps
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| Call: | Make-whole call at Treasuries plus 10 bps until Jan. 15, 2028, then a par call
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| Change-of-control put: | 101%
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| Price guidance: | Treasuries plus 65 bps area, plus or minus 5 bps; initial talk at Treasuries plus 95 bps area
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| Notes due 2031
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| Amount: | $1 billion
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| Maturity: | March 15, 2031
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| Coupon: | 1.5%
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| Price: | 99.763
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| Yield: | 1.525%
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| Spread: | Treasuries plus 75 bps
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| Call: | Make-whole call at Treasuries plus 12.5 bps until Dec. 15, 2030, then a par call
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| Change-of-control put: | 101%
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| Price guidance: | Treasuries plus 80 bps area, plus or minus 5 bps; initial talk at Treasuries plus 105 bps area
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| Notes due 2050
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| Amount: | $500 million
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| Maturity: | Nov. 15, 2050
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| Coupon: | 2.5%
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| Price: | 99.998
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| Yield: | 2.548%
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| Spread: | Treasuries plus 100 bps
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| Call: | Make-whole call at Treasuries plus 15 bps until May 15, 2050, then a par call
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| Change-of-control put: | 101%
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| Price guidance: | Treasuries plus 105 bps area, plus or minus 5 bps; initial talk at Treasuries plus 130 bps-135 bps area
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