Research Update: Covanta Holding Corp. Outlook Revised To Positive, Ratings Affirmed; Proposed Secured Debt Rated 'BB' (Recovery: '1')

U.S.-based waste to energy (WtE) provider Covanta Holding Corp. has announced a refinancing in conjunction with its acquisition by EQT Infrastructure (EQT). Although the transaction will increase Covanta's leverage over the near term, we view EQT's ownership favorably and, combined with the company's strong recent operating trends, forecast material deleveraging over the next few years. The company's proposed capital structure comprises $67 million of cash on the balance sheet, a $440 million revolving credit facility, a $1.275 billion term loan B, a $100 million term loan C, and $1.625 billion of new and existing senior unsecured notes. Our estimate of gross debt of $3.12 bil. includes assumed debt. We revised our outlook on Covanta to positive from stable and affirmed

...- U.S.-based waste to energy (WtE) provider Covanta Holding Corp. has announced a refinancing in conjunction with its acquisition by EQT Infrastructure (EQT). Although the transaction will increase Covanta's leverage over the near term, we view EQT's ownership favorably and, combined with the company's strong recent operating trends, forecast material deleveraging over the next few years. - The company's proposed capital structure comprises $67 million of cash on the balance sheet, a $440 million revolving credit facility, a $1.275 billion term loan B, a $100 million term loan C, and $1.625 billion of new and existing senior unsecured notes. Our estimate of gross debt of $3.12 bil. includes assumed debt. - We revised our outlook on Covanta to positive from stable and affirmed our 'B+' issuer credit rating. At the same time, we assigned our '##' issue-level rating and '1' recovery rating to the company's proposed senior secured debt and our 'B' issue-level rating and '5' recovery rating...

Research Update