Casella Waste Systems, Inc. Announces Pricing for New Credit Facility
October 07 2016 - 1:00PM
Casella Waste Systems, Inc. (NASDAQ:CWST), a regional solid waste,
recycling and resource management services company (the “Company”),
today announced that, in connection with its previously announced
potential debt refinancing, Bank of America Merrill Lynch has
advised the Company that certain financial institutions and other
investors have provided commitments to fund a new term loan B
facility in the amount of $350 million (the “Term Loan B Facility”)
priced at 99.50% of the principal amount and a revolving line of
credit facility in the amount of $160 million (the “Revolving
Credit Facility” and, together with the Term Loan B Facility, the
“Credit Facility”).
Upon closing, the Term Loan B Facility is expected to have a
7-year term and will bear interest at a rate of LIBOR plus 3.00%
per annum (with a 1.00% LIBOR floor), which will be reduced to a
rate of LIBOR plus 2.75% upon the Company reaching a consolidated
net leverage ratio of 3.75x or less. The Revolving Credit
Facility is expected to have a 5-year term and will initially bear
interest at a rate of LIBOR plus 3.00% per annum, which shall be
adjusted from an applicable rate of 2.50% to 3.25% depending on the
Company’s consolidated net leverage
ratio.
The closing of the Credit Facility is expected to be completed
on October 17, 2016, subject to the negotiation, execution and
delivery of definitive loan documentation and customary closing
conditions. The Company intends to use the proceeds of the
Credit Facility for the redemption of all of the Company’s
outstanding 7.75% Senior Subordinated Notes due 2019 (the “Senior
Subordinated Notes”), the repayment in full of the Company’s
existing senior secured asset-based revolving credit and letter of
credit facility, which matures on February 2020 (or November 2018
if the Senior Subordinated Notes are not refinanced by then),
transaction related fees and expenses, working capital and other
purposes.
The Company expects the total cost of this transaction,
including the call premium on the Senior Subordinated Notes to be
redeemed and the discount on the new Term Loan B Facility, will be
approximately $15 million. Total annual interest savings is
expected to be approximately $11 million.
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont,
provides solid waste management services consisting of collection,
transfer, disposal, and recycling services in the northeastern
United States. For further information, investors contact Ned
Coletta, Chief Financial Officer at (802) 772-2239; media contact
Joseph Fusco, Vice President at (802) 772-2247; or visit the
Company’s website at http://www.casella.com.
Safe Harbor Statement
Certain matters discussed in this press release, including, but
not limited to, the statements regarding the Company’s plans,
strategies and objectives for the Credit Facility, the terms of the
Credit Facility, the timing and closing of the Credit Facility and
the Company’s expectations regarding the use of proceeds of the
Credit Facility, are "forward-looking statements" intended to
qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can generally be identified as such by
the context of the statements, including words such as “believe,”
“expect,” “anticipate,” “plan,” “may,” “would,” “intend,”
“estimate,” “guidance” and other similar expressions, whether in
the negative or affirmative. These forward-looking statements are
based on current expectations, estimates, forecasts and projections
about the industry and markets in which we operate and management’s
beliefs and assumptions. There can be no assurance that the Company
will be able to complete the closing of the Credit Facility on the
terms indicated or at all. We cannot guarantee that we actually
will achieve the financial results, plans, intentions, expectations
or guidance disclosed in the forward-looking statements made. Such
forward-looking statements, and all phases of our operations,
involve a number of risks and uncertainties, any one or more of
which could cause actual results to differ materially from those
described in our forward-looking statements. Such risks and
uncertainties include or relate to, among other things: conditions
in financial and capital markets, including the impact of
prospective interest rate increases, could impact the Company’s
ability to complete the closing of the Credit Facility on favorable
terms, if at all; adverse weather conditions that have negatively
impacted and may continue to negatively impact our revenues and our
operating margin; current economic conditions that have adversely
affected and may continue to adversely affect our revenues and our
operating margin; we may be unable to increase volumes at our
landfills or improve our route profitability; our need to service
our indebtedness may limit our ability to invest in our business;
we may be unable to reduce costs or increase pricing or volumes
sufficiently to achieve estimated Adjusted EBITDA and other
targets; landfill operations and permit status may be affected by
factors outside our control; groundwater contamination discovered
near our Southbridge landfill may delay our permitting activities
at that landfill and result in costs and liabilities as well as
impacting our disposal revenues at that site, each of which could
impact our results of operations; we may be required to incur
capital expenditures in excess of our estimates; fluctuations in
energy pricing or the commodity pricing of our recyclables may make
it more difficult for us to predict our results of operations or
meet our estimates; we may incur environmental charges or asset
impairments in the future; and actions of activist investors and
the cost and disruption of responding to those actions. There are a
number of other important risks and uncertainties that could cause
our actual results to differ materially from those indicated by
such forward-looking statements. These additional risks and
uncertainties include, without limitation, those detailed in Item
1A, “Risk Factors” in our Form 10-K for the fiscal year ended
December 31, 2015.
We undertake no obligation to update publicly any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required by law.
Investors:
Ned Coletta
Chief Financial Officer
(802) 772-2239
Media:
Joseph Fusco
Vice President
(802) 772-2247
http://www.casella.com
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