Fri Dec 23, 2011 11:46am EST


-- U.S.-based solid waste services company WCA Waste Corp. has announced
that it's signed a definitive agreement to be acquired by an affiliate of
Macquarie Infrastructure Partners Inc.
     -- We have placed our ratings on WCA, including the 'B' corporate credit
rating, on CreditWatch with developing implications.
     -- We will resolve our CreditWatch listing on WCA pending further
information on the pro forma capital structure and a reassessment of its
business and financial risk profiles.
NEW YORK (Standard & Poor's) Dec. 23, 2011--Standard & Poor's Ratings Services
placed its ratings, including the 'B' corporate credit rating, on
Houston-based WCA Waste Corp. on CreditWatch with developing
implications.
"The CreditWatch listing follows WCA's announcement that it has signed a
definitive agreement to be acquired by infrastructure fund Macquarie
Infrastructure Partners II, an affiliate of Macquarie Infrastructure Partners
Inc.," said Standard & Poor's credit analyst James Siahaan. "The agreement
values the transaction at $  6.50 per common share of WCA, or approximately $  526
million. We expect the acquisition to be funded by new credit facilities and
sponsor equity, with proceeds to be used to refinance the existing credit
facility and to redeem WCA's Series A 5% payment-in-kind convertible preferred
stock. Proceeds may also be used to redeem a portion of the company's $  175
million 7.50% senior unsecured notes due June 15, 2019. Subject to customary
closing conditions and the receipt of regulatory approval, we expect the
transaction to close during the first quarter of 2012, at which point WCA's
common stock will cease to be publicly traded on the NASDAQ."
"The developing implications of the CreditWatch listing indicate that we could
raise, lower, or affirm the ratings depending on future developments including
the details of the financing sources and our assessment of the company's
business strategy and financial policies," Mr. Siahaan continued. "We could
raise the ratings modestly if the financial risk profile significantly
improves, particularly if Macquarie's equity investment in WCA significantly
reduces the company's pro forma debt leverage. However, we could lower the
ratings if the debt component of the transaction value is significant enough
to weaken credit measures past the expected range for the current ratings."
We could affirm the ratings if the transaction results in similar default
prospects as the current profile, or if the transaction does not close at all.
Standard & Poor's will meet with management and discuss developments related
to the transaction. We will update or resolve the CreditWatch when further
details are available, subject to a reassessment of our view on the final
capital structure, financial policies, liquidity, and earnings prospects.
RELATED CRITERIA AND RESEARCH
     -- Methodology And Assumptions: Liquidity Descriptors For Global
Corporate Issuers, Sept. 28, 2011
     -- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded,
May 27, 2009


Yahoo! Finance: Waste Management Industry News

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