By Cristal Cody
Tupelo, Miss., May 14 – Waste Management, Inc. priced a $4 billion five-tranche offering of fixed-rate senior notes (Baa1/A-/BBB+) on Tuesday, according to a market source.
The company sold $750 million of 2.95% five-year notes at a spread of Treasuries plus 75 basis points.
A $750 million tranche of 3.2% seven-year notes priced with a Treasuries plus 90 bps spread.
Waste Management sold $1 billion of 3.45% 10-year notes at a spread of 105 bps over Treasuries.
A $500 million 20-year tranche of notes priced with a 4% coupon and a Treasuries plus 115 bps spread.
In the final tranche, the company sold $1 billion of 4.15% 30-year notes at a spread of 130 bps over Treasuries.
The notes priced on the tight side of guidance.
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., LLC, J.P. Morgan Securities LLC and Mizuho Securities USA LLC were the bookrunners. The syndicate also included Barclays, BNP Paribas Securities Corp., BofA Securities Inc., Citigroup Global Markets Inc., SMBC Nikko Securities America, Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities LLC.
The notes are fully guaranteed by subsidiary Waste Management Holdings, Inc.
On April 14, Waste Management said it entered into a plan of merger with Advanced Disposal Services, Inc. and its indirect subsidiary Everglades Merger Sub Inc. Everglades Merger Sub will merge into Advanced Disposal Services and continue as the surviving company and Waste Management’s indirectly wholly owned subsidiary.
Proceeds from the offering will be used for merger costs and fees and to fund a concurrent tender offer for certain outstanding senior notes.
If the merger is not completed on or before July 14, 2020, the 2024, 2026, 2029 and 2039 notes will have a special mandatory redemption at 101.
The deal includes a change-of-control put at 101%.
Waste Management is a Houston-based provider of water management environmental services.
| Issuer: | Waste Management, Inc.
|
| Guarantor: | Waste Management Holdings, Inc.
|
| Amount: | $4 billion
|
| Description: | Senior notes
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., LLC, J.P. Morgan Securities LLC and Mizuho Securities USA LLC
|
| Co-managers: | Barclays, BNP Paribas Securities Corp., BofA Securities Inc., Citigroup Global Markets Inc., SMBC Nikko Securities America, Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities LLC
|
| Trade date: | May 14
|
| Ratings: | Moody’s: Baa1
|
| S&P: A-
|
| Fitch: BBB+
|
| Distribution: | SEC registered
|
|
|
| Five-year notes
|
| Amount: | $750 million
|
| Maturity: | June 15, 2024
|
| Coupon: | 2.95%
|
| Spread: | Treasuries plus 75 bps
|
| Call features: | Special mandatory redemption at 101 if merger not completed on or before July 14, 2020
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 80 bps area, plus or minus 5 bps; initial talk at Treasuries plus 95 bps area
|
|
|
| Seven-year notes
|
| Amount: | $750 million
|
| Maturity: | June 15, 2026
|
| Coupon: | 3.2%
|
| Spread: | Treasuries plus 90 bps
|
| Call features: | Special mandatory redemption at 101 if merger not completed on or before July 14, 2020
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 95 bps area, plus or minus 5 bps; initial talk at Treasuries plus 105 bps-110 bps area
|
|
|
| 10-year notes
|
| Amount: | $1 billion
|
| Maturity: | June 15, 2029
|
| Coupon: | 3.45%
|
| Spread: | Treasuries plus 105 bps
|
| Call features: | Special mandatory redemption at 101 if merger not completed on or before July 14, 2020
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 110 bps area, plus or minus 5 bps; initial talk at Treasuries plus 115 bps-120 bps area
|
|
|
| 20-year notes
|
| Amount: | $500 million
|
| Maturity: | July 15, 2039
|
| Coupon: | 4%
|
| Spread: | Treasuries plus 115 bps
|
| Call features: | Special mandatory redemption at 101 if merger not completed on or before July 14, 2020
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 120 bps area, plus or minus 5 bps; initial talk at Treasuries plus 130 bps area
|
|
|
| 30-year notes
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| Amount: | $1 billion
|
| Maturity: | July 15, 2049
|
| Coupon: | 4.15%
|
| Spread: | Treasuries plus 130 bps
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 135 bps area, plus or minus 5 bps; initial talk at Treasuries plus 140 bps-145 bps area
|
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