S&P: WCA Waste Corp. 'B+' Ratings Affirmed On First-Lien Loan Add-On; Outlook Stable

S&P Global Ratings today affirmed its 'B+' long-term issuer credit rating on Houston-based WCA Waste Corp. (WCA) following its proposed $100 million add-on to its first-lien debt to repay its revolver borrowings of about $48 million. The remainder will be held in cash. The outlook is stable.

As part of this transaction, WCA is repricing its senior secured credit facilities, including its revolving credit facility and term loan (including the $100 million add-on). In addition, the $125 million revolving credit facility will be extended to February 2023 (six months before the term loan B maturity) from August 2021.

We also affirmed our 'B+' issue-level rating on the company's senior secured credit facilities, indicating our expectation for meaningful recovery in the event of a default. The senior secured credit facilities consist of a $125 million revolver and a $400 million (including the proposed $100 million add-on) first-lien term loan, both due in 2023.

The affirmation of our 'B+' issuer credit rating reflects our expectation that leverage will be largely unchanged after factoring in acquisitions which will increase EBITDA in 2018. We expect WCA will use the cash from this transaction with modest debt borrowings to fund near-term acquisitions, leaving leverage largely unchanged on a pro forma basis in 2018.

The outlook on WCA is stable, reflecting stable operating trends and financial policies that support current ratings. We expect the company's FFO-to-adjusted-debt ratio to remain between 12% and 20%. Steady revenue streams from its landfills and collection operations, a decent market presence in the South, and contributions from acquisitions should help diversify WCA's service mix and support operating results.

If competitive pressures or operating inefficiencies contribute to significant deterioration in WCA's earnings, this could result in reduced covenant cushions and liquidity or an inability to maintain the target financial ratio. For example, if EBITDA margins were to compress by more than 200 basis points (bps), this could result in headroom under WCA's debt to EBITDA covenant falling below 10%. This could limit the company's availability under its revolving credit facility and prompt us to consider a downgrade. In another scenario, we may consider a downgrade if the company increases leverage to fund an acquisition or for an imprudent use of cash, and its FFO–to-adjusted-debt ratio falls below 12% with unlikely prospects for improvement. This could happen if 2018 EBITDA margins contract 400 bps from our base-case scenario.

Given WCA's limited competitive position and diversity among other solid-waste services companies, along with its current capital structure in relation to its cash flow generation ability, an upgrade appears unlikely in the next year. However, if the company increases its FFO–to-adjusted-debt ratio above 20% on a sustained basis, we could consider an upgrade, which could result from a 400-bps EBITDA margin expansion coupled with a 200-bps increase in revenue growth from our base case scenario. In addition, we would also need to believe that future financial policies will support this improvement on a sustained basis.
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IanmazSurne
IanmazSurne 13 апреля 2018 01:13
Народ кто желает играть в современные игры на самых высоких настройках с динамичными теняими
даже на самых слабых ПК или ноутах. Без лагов и фризов (Но нужен более менее нормальный интернет).
Читайте статья по настройке компа здесь.
Видео по установке и настройке смотрите тут.
Играю уже пол года на ведре 2005 г. Буду рад кому помог разорить буржуев игровой индустрии!!!