Waste Management, Inc.
), a provider of integrated waste management services, announced
the pricing of its underwritten 10-year note issuance. The
company confirmed that the offering will be worth $350 million in
aggregate principal amount of 3.50% notes due May 15, 2024.
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The offering closes on May 8, 2014. The notes will have complete
and unconditional guarantee of Waste Management Holdings, Inc., a
wholly-owned subsidiary of the company. J.P. Morgan Securities
LLC, the U.S. investment banking arm of
), Deutsche Bank Securities Inc., a division of
Deutsche Bank AG
) and RBS Securities Inc. are acting as the joint lead managers
and handling the book-running of the issue.
The company plans to utilize the net proceeds of the offering to
pay down about $346 million of outstanding borrowings, obtained
under its revolving credit facility. The revolving credit
facility was accessed to pay back its 5.00% senior notes that
matured in March 2014.
The note offering will be neutral to the company's leverage
following the repayment of the revolver debt. As of Mar 31, 2014,
Waste Management's long-term debt stood at $8,978 million.
Fitch Ratings, a leading credit rating agency, assigned a 'BBB'
rating to Waste Management's planned senior unsecured note
issue. This indicates that the company has adequate
capacity to meet its financial commitments.
Other credit rating agencies like Moody's gave the company a
comparable Baa3 rating, while Standard & Poor's accredited
the company with a slightly better rating of A-. It denotes a
strong capacity to meet financial obligations, though moderately
vulnerable to adverse economic circumstances.
Waste Management has a leading market position in the industry,
showing consistently strong operating performance with strong
cash flow characteristics.
Last month, Waste Management reported first quarter 2014 results
wherein it beat earnings healthily, driven by a solid execution
of strategic plans and vital momentum in both yield and cost
controls. The company withstood operational hurdles caused by the
harsh winter, thus demonstrating business stability and robust
Waste Management currently holds a Zacks Rank #3 (Hold). Another
stock in the industry that is worth considering is
Clean Harbors, Inc.
), sporting a Zacks Rank #2 (Buy).