Recycle and Resource Operations Pty Ltd.

The stable outlook reflects our expectation that Bingo will maintain debt to EBITDA within a range of 5x to 6x over the next two years as the business increases in scale, operational capability, and geographic diversity. We could lower the rating if we forecast Bingo to maintain debt to EBITDA above 7x, either as a result of debt-funded growth or a material erosion in the company's revenue growth or profitability. The latter could occur from a material decline in residential and commercial construction activity, aggressive competitor activity, protracted operational difficulties in its recycling operations, or higher regulatory and compliance costs. Upward rating pressure could occur if we forecast debt to EBITDA to be sustainably less than 5x and see evidence

...Recycle and Resource Operations Pty Ltd.'s (Bingo Industries Ltd.) vertically integrated business model and capital assets enhance its Sydney market position. Bingo participates across the value chain in the collection, recycling, and disposal of waste from the construction and infrastructure industries in Sydney and Melbourne. About three quarters of group EBITDA is generated from the post-collections segment, which enjoys higher margins and higher capital barriers than collections and should continue to benefit from the growing waste disposal industry shift toward recycling. In contrast, the collections business is highly fragmented and competitive with minimal barriers to entry, albeit with a steady growth profile and diversified customer base. Bingo operates in a highly regulated industry exposed to significant environmental risks. The waste management industry is subject to significant and growing environmental and workplace safety regulations, which poses both risks and opportunities...

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