Summary
Waste Management, Inc. (WM) has entered into new credit agreements aimed at enhancing its financial flexibility and operational capabilities. On May 27, 2022, the company amended and restated its revolving credit facility, extending its term to May 27, 2027, with a total commitment of $3.5 billion and an additional $1 billion accordion feature. This facility will serve the U.S. and Canadian needs of WM and its subsidiaries, allowing for borrowings in Canadian dollars up to the equivalent of $375 million. In addition to the revolving credit, WM has secured a new two-year, $1.0 billion term loan agreement maturing on May 27, 2024. This term loan is intended for general corporate purposes, including potential acquisitions and debt refinancing. These agreements include customary covenants, with a primary financial metric being a maximum total debt to EBITDA ratio of 3.75:1, which can temporarily increase to 4.25:1 following significant acquisitions. The company also has the ability to incorporate environmental, social, and governance (ESG) targets to potentially adjust borrowing costs, highlighting a commitment to sustainability.
Key Highlights
- 1Amended and restated a $3.5 billion revolving credit facility with a maturity date of May 27, 2027, and a $1 billion accordion feature.
- 2Entered into a new $1.0 billion term loan credit agreement with a maturity date of May 27, 2024, for general corporate purposes, including acquisitions and refinancing.
- 3The credit agreements maintain a maximum total debt to EBITDA leverage ratio of 3.75:1, with a provision for an increase to 4.25:1 following acquisitions exceeding $200 million.
- 4Includes a commitment to establishing ESG targets that could potentially lead to adjustments in facility fees and interest rates.
- 5The revolving credit facility accommodates borrowings in Canadian dollars up to $375 million equivalent.
- 6At closing, WM had approximately $2.3 billion in unused and available credit capacity under the revolving facility.
- 7The new agreements aim to provide significant financial flexibility for operational needs, strategic investments, and potential future growth opportunities.