Summary
Republic Services, Inc. (RSG) announced on June 8, 2018, the execution of a new $2.25 billion unsecured revolving credit facility. This facility, maturing in June 2023, replaces two prior credit facilities totaling $2.25 billion and provides enhanced financial flexibility. It includes an option to increase the facility by an additional $1.0 billion, subject to certain conditions, and offers borrowers the flexibility to choose between base rate or Eurodollar rate borrowings with applicable margins tied to debt ratings.
Key Highlights
- 1Entered into a new $2.25 billion unsecured revolving credit facility maturing in June 2023.
- 2Replaced two prior committed credit facilities totaling $2.25 billion.
- 3The new facility allows for potential increases of up to $1.0 billion at the company's option.
- 4Borrowings can be at a base rate or Eurodollar rate, with margins dependent on debt ratings.
- 5The credit agreement includes covenants requiring maintenance of specific financial ratios (EBITDA to interest, total debt to EBITDA).
- 6Compliance with covenants permits dividend payments and common stock repurchases.
- 7The termination of prior facilities was funded by available liquidity, repaying all outstanding indebtedness and fees.
Frequently Asked Questions
The primary purpose of this 8-K filing is to disclose Republic Services, Inc.'s entry into a new, significant material definitive agreement: a $2.25 billion revolving credit facility.
The new $2.25 billion facility replaces two previous facilities that also totaled $2.25 billion. The new facility is unsecured and has a maturity date in June 2023, offering potential for extensions and an additional $1.0 billion in capacity.
The credit agreement includes customary covenants requiring Republic Services to maintain certain financial ratios, specifically a minimum ratio of EBITDA to interest expense and a maximum ratio of total debt to EBITDA. Compliance with these covenants is necessary for activities like paying dividends and repurchasing stock.
This new credit facility enhances liquidity and financial flexibility by providing a substantial, unsecured borrowing capacity that can be expanded. It also streamlines the company's credit arrangements by consolidating them into a single, potentially larger facility.