The rating on Covanta Holding Corp.'s $460 million cash convertible senior unsecured notes due 2014, $373.7 million senior unsecured convertible debentures due 2027 ($57 million outstanding as of Dec. 31, 2010), and $400 million senior unsecured notes due 2020 is 'B'. The recovery rating on all senior unsecured debt at Covanta Holding is '6', indicating our expectation for negligible (0%-10%) recovery of principal if a payment default occurs. The outlook is stable. The credit ratings on Covanta Holding reflect its reliance on residual distributions from its wholly owned subsidiary Covanta Energy Corp. (Covanta Energy), and we base the ratings on the consolidation of the two entities. Covanta Energy depends in turn on distributions from project investments. Although Covanta Energy generates
