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  • Text-S&P places WCA Waste Corp. on cw developing




    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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