8-KMaterial AgreementsFinancial EventsExhibits & Filings

REPUBLIC SERVICES, INC. 8-K Report, Material Agreement (Sep 10, 2009)

Filed September 10, 2009For Securities:RSG

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.

Frequently Asked Questions

The primary purpose is to strengthen Republic Services' financial position by reducing outstanding debt. The proceeds will be used to retire older notes, pay down the revolving credit facility, and manage tax obligations related to a past merger, while also supporting general corporate needs.

The net proceeds of approximately $641 million will be allocated to: tendering for certain outstanding senior notes (maturing 2010-2011), reducing the revolving credit facility balance, remitting estimated tax payments from the Allied Waste merger, and for general corporate purposes including capital expenditures.

The notes are general senior unsecured obligations due September 15, 2019, guaranteed by certain subsidiaries. The indenture includes provisions that restrict the company's ability to create liens, engage in sale and leaseback transactions, and requires the successor entity to assume the notes' obligations in case of merger or sale of assets. Holders also have rights in case of a change of control.

The Registration Rights Agreement obligates Republic Services to work towards registering the privately placed notes with the SEC. This will allow for an exchange offer where current holders can receive freely tradable notes, increasing liquidity and marketability for these securities.