Summary
Republic Services, Inc. (RSG) filed a Current Report (8-K) on May 9, 2011, to announce the completion of a significant public offering of notes. The company successfully issued $700 million in 3.800% notes due 2018, $550 million in 4.750% notes due 2023, and $600 million in 5.700% notes due 2041, totaling $1.85 billion in aggregate principal amount. This offering was conducted under an existing indenture and was registered with the SEC. The primary use of the net proceeds from this offering is to refinance existing debt and manage its capital structure. Specifically, the funds will be used to call Republic's 7.125% Senior Notes due 2016, purchase a portion of its subsidiary Browning-Ferris Industries' outstanding debentures, reduce balances on its revolving credit facility, and for general corporate purposes. This move indicates a strategic effort by Republic Services to lower its overall interest expense and optimize its debt maturity profile.
Key Highlights
- 1Completion of a $1.85 billion public offering of senior notes across three tranches (2018, 2023, and 2041 maturity dates).
- 2The offering includes $700M of 3.800% notes due 2018, $550M of 4.750% notes due 2023, and $600M of 5.700% notes due 2041.
- 3Proceeds will be used to refinance higher-coupon debt, specifically calling the 7.125% Senior Notes due 2016.
- 4The company will also use proceeds to purchase a portion of subsidiary Browning-Ferris Industries' outstanding debentures.
- 5Reduced balances on the company's revolving credit facility are also an intended use of funds.
- 6The notes are unsubordinated and unsecured obligations of Republic Services, guaranteed by certain subsidiaries.
- 7The offering was conducted under an effective shelf registration statement and involved major underwriters including Merrill Lynch, Barclays Capital, J.P. Morgan, and RBS Securities.