Casella Waste Systems, Inc. Completes Refinancing of Senior Secured Credit Facility
10 July 2009 - 7:33AM
Marketwired
Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste,
recycling and resource management services company, announced today
that it has successfully completed the refinancing of its existing
senior secured debt facilities with a senior secured first lien
credit facility (the "Senior Secured Credit Facility"), consisting
of a $177.5 million revolving credit facility (the "Revolver
Facility") and a $130.0 million aggregate principal term loan (the
"Term Loan B"). In connection with the Senior Secured Credit
Facility, the company simultaneously completed the previously
announced offering of $180.0 million aggregate principal amount of
11% senior second lien notes due 2014 (the "Notes").
"Because of our stable cash flow generation and our valuable
solid waste and resource optimization assets we were able to
complete a successful refinancing of our senior secured debt
maturities despite the continued weakness in the financial system,"
John W. Casella, chairman and CEO of Casella Waste Systems, said.
"We received strong market demand for both the Notes offering and
the Term Loan B. Since the Notes offering was oversubscribed, we
were able to obtain a favorable interest rate and favorable
original issue discount."
"With the strong demand for the Term Loan B, we were able to
downsize the Notes offering by $25.0 million and upsize the Term
Loan B by $30.0 million," Casella said. "This is a favorable
outcome because the effective yield of the Term Loan B is
approximately 3.60% lower than the Notes, and the Term Loan B is
also pre-payable."
"Our next debt maturity is in December 2012, before which our
team will execute against our mid-term strategy to reduce debt
leverage by increasing cash flows and selling non-core assets,"
Casella said. "In addition, under the Senior Secured Credit
Facility, the financial covenants were reset to provide us with
more flexibility compared to the refinanced facilities. With the
completion of the refinancing, the company is in full compliance
with the covenants as amended under the new facility."
The net proceeds from the Senior Secured Credit Facility and
from the Notes offering were used to refinance the borrowings under
the company's $525.0 million senior secured credit facility due
April 2010. After the transaction, the company expects to have
$87.3 million of unused capacity on the Revolver Facility, after
taking into account $51.7 million of letters of credit.
For the first two quarters after the closing date, the interest
rate for borrowings under the $177.5 million Revolver Facility will
be LIBOR plus a margin of 4.50% per annum, and thereafter the
applicable margin will be determined in accordance with the pricing
grid as set forth in the Second Amended and Restated Revolving
Credit and Term Loan Agreement dated July 9, 2009. The interest
rate for the $130.0 million aggregate principal Term Loan B will be
LIBOR plus a margin of 5.00% per annum, provided that LIBOR shall
not be less than 2.00% per annum. The Term Loan B was issued at an
original issue price of 94.500% of the principal amount of the
loan.
The Senior Secured Credit Facility is subject to customary
affirmative, negative, and financial covenants, generally
consistent with the company's existing credit agreement. The
company has the right to increase the amount of the Senior Secured
Credit Facility by an aggregate amount of $42.5 million, in its
discretion, subject to certain conditions.
The company has engaged its independent registered accounting
firm to re-audit its financial statements for the 2009 fiscal year
following this refinancing and the closing of the offering of the
Notes. The company expects that the opinion on these re-audited
financial statements will eliminate the explanatory paragraph about
its ability to continue as a going concern.
The Notes have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and unless so registered,
may not be offered or sold in the United States absent registration
or an applicable exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act and other
applicable securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these Notes, nor shall there be any
sale of these Notes in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
This notice is being issued pursuant to and in accordance with Rule
135c under the Securities Act.
About Casella Waste Systems, Inc.
Casella Waste Systems is an integrated solid waste and resource
management company headquartered in Rutland, Vermont. For further
information, investors should contact Ned Coletta, director of
investor relations at (802) 772-2239; media should 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 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 Casella "believes," "expects,"
"anticipates," "plans," "may," "will," "would," "intends,"
"estimates" and other similar expressions, whether in the negative
or affirmative. Among the forward-looking statements in this press
release are statements regarding the intended use of the proceeds
from the refinancing and the Company's expectations that the
auditor's opinion on its re-audited financial statements will
eliminate the explanatory paragraph about its ability to continue
as a going concern. All of these forward-looking statements are
based on current expectations, estimates, forecasts and projections
about the industry and markets in which Casella operates and
management's beliefs and assumptions. Casella cannot guarantee that
it actually will achieve the plans, intentions or expectations
disclosed in the forward-looking statements made. Such
forward-looking statements, and all phases of Casella's 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 its forward-looking statements. Such risks and
uncertainties include or relate to, among other things: Casella may
be unable to reduce costs or increase revenues sufficiently to
achieve estimated EBITDA and other targets; landfill operations and
permit status may be affected by factors outside its control;
Casella may be required to incur capital expenditures in excess of
its estimates; fluctuations in the commodity pricing of its
recyclables may make it more difficult for Casella to predict its
results of operations or meet its estimates; and Casella may incur
environmental charges or asset impairments in the future. There are
a number of other important risks and uncertainties that could
cause Casella's 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 Casella's Form 10-K for the year
ended April 30, 2009. Casella does not necessarily intend to update
publicly any forward-looking statements whether as a result of new
information, future events or otherwise, except as required.
Contact: Ned Coletta Director of Investor Relations (802)
772-2239 Media Contact: Joseph Fusco Vice President (802)
772-2247
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