Summary
Republic Services, Inc. (RSG) announced the successful completion of a $650 million private offering of Senior Notes due 2019. The net proceeds, approximately $641 million, are earmarked for significant debt reduction and strategic financial management. Specifically, the funds will be used to tender for outstanding senior notes maturing in 2010 and 2011, reduce the outstanding balance on the company's revolving credit facility, and cover estimated tax payments related to the 2008 merger with Allied Waste Industries. A portion will also be allocated for general corporate purposes and capital expenditures. This debt issuance is a key move to strengthen the company's balance sheet and manage its existing debt obligations. The notes are general senior unsecured obligations, guaranteed by certain subsidiaries, and are subject to covenants that restrict the company's ability to incur additional liens, enter into sale and leaseback transactions, or undergo certain fundamental corporate changes without assuming obligations on the notes. The company has also entered into a Registration Rights Agreement to facilitate the exchange of these privately placed notes for freely tradable, registered notes.
Key Highlights
- 1Republic Services Inc. (RSG) has issued and sold $650 million of Senior Notes due 2019.
- 2Net proceeds of approximately $641 million will be used for debt reduction, including tendering for outstanding notes maturing in 2010-2011 and reducing its revolving credit facility balance.
- 3Funds will also be used for estimated tax payments stemming from the 2008 merger with Allied Waste Industries.
- 4The remaining proceeds are designated for general corporate purposes and capital expenditures.
- 5The notes are senior unsecured obligations, guaranteed by certain subsidiaries, and mature on September 15, 2019.
- 6The company entered into a Registration Rights Agreement to register these notes for public trading.
- 7Covenants in the indenture limit the creation of liens, sale and leaseback transactions, and mergers/asset sales without assuming obligations on the new notes.