WASTE CONNECTIONS ANNOUNCES PRICING OF $750 MILLION OF SENIOR NOTES

Rhea-AI Summary

Waste Connections, Inc. announces the pricing of a $750 million senior notes offering at 5.000% due 2034. The net proceeds are expected to be approximately $734.2 million, with the offering closing on February 21, 2024. The funds will be used to repay borrowings under credit facilities. BofA Securities, J.P. Morgan, PNC Capital Markets LLC, and Truist Securities are the joint book-running managers and underwriters.

Insights

Financial Analyst

The pricing of Waste Connections' senior notes offering at 5.000% due 2034 is a significant move for the company's capital structure. The discount at which the notes are priced, 98.835% of their face value, indicates an initial yield slightly above the coupon rate. This pricing strategy could reflect current market conditions, including investor demand and prevailing interest rates. The proceeds of approximately $734.2 million, after fees and expenses, suggest a strategic approach to debt management, as the funds are earmarked for repaying existing credit facilities.

Investors should note that the use of proceeds to repay existing debt could potentially improve the company's debt maturity profile and reduce interest expenses, possibly leading to an improved credit rating. However, the impact on the company's leverage ratio will depend on the terms of the new notes compared to the existing debt. The involvement of major financial institutions as underwriters, such as BofA Securities and J.P. Morgan, provides a level of credibility to the offering and could facilitate investor interest.

Debt Capital Markets Expert

The decision to access the public debt market via a shelf registration statement filed with the SEC enhances Waste Connections' financial flexibility. This approach allows for quicker capital raising when market conditions are favorable. The 5.000% coupon rate should be compared with industry benchmarks and the company's creditworthiness to assess investor appetite. Additionally, the chosen maturity of 2034 gives insight into the company's long-term financial strategy and risk management.

It's important for stakeholders to understand that the senior notes are likely to be senior unsecured obligations, ranking equally with all of Waste Connections' existing and future senior unsecured debt. This means that in the event of bankruptcy or liquidation, these note holders would be paid out before subordinated debt holders. However, they would still be behind secured debt holders in the priority chain.

Market Research Analyst

From a market perspective, the timing of the offering could be influenced by Waste Connections' assessment of the macroeconomic environment, including interest rate trends and market liquidity. The fixed rate of 5.000% locks in the cost of capital for the next decade, which can be advantageous in a rising interest rate environment. The allocation of funds to repay existing debt, rather than financing new projects or acquisitions, suggests a conservative financial policy focused on balance sheet strength.

Analyzing the secondary market performance of these notes post-issuance will provide further insights into market sentiment towards the company and the waste management industry as a whole. It will be critical to monitor the trading premium or discount on these notes as a gauge of the market's view on the company's future creditworthiness.

TORONTO, Feb. 15, 2024 /PRNewswire/ -- Following the previous announcement of the launch of a senior notes offering, Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") announced today that it has priced an underwritten public offering (the "Offering") of $750 million aggregate principal amount of its 5.000% Senior Notes due 2034 (the "Notes") at a price to the public of 98.835% of their face value. The Offering is expected to close on February 21, 2024, subject to customary closing conditions. Net proceeds to Waste Connections from the Offering are expected to be approximately $734.2 million, after deducting underwriting fees and estimated Offering expenses, and are expected to be used to repay a portion of the borrowings outstanding under its revolving credit facility and a portion of the term loan outstanding under its term credit facility, in each case provided under its credit agreement.

BofA Securities, J.P. Morgan, PNC Capital Markets LLC and Truist Securities are acting as joint book-running managers and underwriters for the Offering. The Offering is being made pursuant to an effective shelf registration statement filed with the U.S. Securities and Exchange Commission (the "SEC") on September 1, 2021 (the "Registration Statement"). Copies of the prospectus supplement and the accompanying base prospectus for the Offering may be obtained by contacting BofA Securities, Inc. at 201 North Tryon Street, NC1-022-02-25, Charlotte, NC 28255-0001, Attention: Prospectus Department, at dg.prospectus_requests@bofa.com or by telephone at 1-800-294-1322, J.P. Morgan Securities LLC at c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department or by telephone at 1-866-803-9204, PNC Capital Markets LLC at 300 Fifth Avenue, 10th Floor, Pittsburgh, PA 15222, Attention: Debt Capital Markets, Fixed Income Transaction Execution, at pnccmprospectus@pnc.com or by telephone toll-free at 855-881-0697 or Truist Securities, Inc. at 3333 Peachtree Road NE, 9th Floor, Atlanta, GA 30326, Attention: Prospectus Department, at TruistSecurities.prospectus@Truist.com or by telephone at 800-685-4786. Copies of the prospectus supplement and the accompanying base prospectus for the Offering will also be available on the SEC's website at http://www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other securities, nor will there be any offer, solicitation or sale of the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. 

About Waste Connections

Waste Connections is an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, including by rail, along with resource recovery primarily through recycling and renewable fuels generation. The Company serves approximately nine million residential, commercial and industrial customers in mostly exclusive and secondary markets across 44 states in the U.S. and six provinces in Canada. Waste Connections also provides non-hazardous oilfield waste treatment, recovery and disposal services in several basins across the U.S. and Canada, as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest. Waste Connections views its Environmental, Social and Governance ("ESG") efforts as integral to its business, with initiatives consistent with its objective of long-term value creation and focused on reducing emissions, increasing resource recovery of both recyclable commodities and clean energy fuels, reducing reliance on off-site disposal for landfill leachate, further improving safety and enhancing employee engagement.

Safe Harbor and Forward-Looking Information

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 ("PSLRA"), including "forward-looking information" within the meaning of applicable Canadian securities laws. These forward-looking statements are neither historical facts nor assurances of future performance and reflect Waste Connections' current beliefs and expectations regarding future events, including the potential Offering and the Company's use of proceeds. These forward-looking statements are often identified by the words "may," "might," "believes," "thinks," "expects," "estimate," "continue," "intends" or other words of similar meaning. All of the forward-looking statements included in this press release are made pursuant to the safe harbor provisions of the PSLRA and applicable securities laws in Canada. Forward-looking statements involve risks, assumptions and uncertainties. Forward-looking statements in this press release include, but are not limited to, statements about the timing and other elements of the Offering. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, risk factors detailed in the preliminary prospectus supplement and the accompanying base prospectus, which are both a part of the Registration Statement and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and those risk factors set forth from time to time in the Company's other filings with the SEC and the securities commissions or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release. Waste Connections undertakes no obligation to update the forward-looking statements set forth in this press release, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.

CONTACT:
Mary Anne Whitney / (832) 442-2253	Joe Box / (832) 442-2153
maryannew@wasteconnections.com	joe.box@wasteconnections.com

 

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SOURCE Waste Connections, Inc.

FAQ

What is the purpose of Waste Connections, Inc.'s $750 million senior notes offering?

The purpose of the $750 million senior notes offering by Waste Connections, Inc. is to repay a portion of the borrowings outstanding under its credit facilities.

When is the expected closing date of the offering?

The offering is expected to close on February 21, 2024.

Who are the joint book-running managers and underwriters for the offering?

BofA Securities, J.P. Morgan, PNC Capital Markets LLC, and Truist Securities are acting as joint book-running managers and underwriters for the offering.

What is the interest rate on Waste Connections, Inc.'s senior notes due 2034?

The interest rate on Waste Connections, Inc.'s senior notes due 2034 is 5.000%.

How much are the net proceeds expected to be from the offering?

The net proceeds from the offering are expected to be approximately $734.2 million.