WASTE CONNECTIONS ANNOUNCES PRICING OF C$500 MILLION OF SENIOR NOTES

Rhea-AI Summary

Waste Connections announced the pricing of a C$500 million offering of 4.50% Senior Notes due 2029, at 99.933% of their face value.

The offering is set to close on June 13, 2024, and is expected to generate net proceeds of approximately C$495 million after underwriting fees and expenses.

The proceeds will be used to repay part of the company's Canadian dollar-denominated revolving credit facility.

CIBC Capital Markets, TD Securities, and Scotiabank are among the joint book-running managers and underwriters for the offering.

The offering will be conducted in the U.S. under a shelf registration statement filed with the SEC, and in Canada through a private placement memorandum.

Positive

• The pricing of C$500 million in 4.50% Senior Notes due 2029 reflects strong investor interest.
• Expected net proceeds of approximately C$495 million enhance liquidity for Waste Connections.
• Proceeds will be used to repay a portion of the Canadian dollar-denominated borrowings, reducing debt.
• Participation by major underwriters like CIBC, TD Securities, and Scotiabank adds credibility to the offering.
• The offering includes effective shelf registration with the SEC and a private placement in Canada, ensuring regulatory compliance.

Negative

• The company is taking on new debt with the issuance of C$500 million in Senior Notes.
• The notes are priced at 99.933% of their face value, indicating a minor discount which may affect investor perceptions.
• Proceeds are primarily being used to repay existing debt, not for growth or new projects.
• Offering expenses and underwriting fees reduce the net proceeds to C$495 million.

Insights

Financial Analyst

Waste Connections' announcement of the C$500 million senior notes offering carries significant financial implications for the company and investors. The offering is priced with a 4.5% interest rate, which suggests market confidence in the company's stability and creditworthiness. The decision to use the net proceeds of approximately C$495 million to repay borrowings under its revolving credit facility is a strategic move to manage debt efficiently. By refinancing existing debt, Waste Connections may benefit from potentially lower overall interest expenses, which could improve their financial health in the long run.

From a financial stability standpoint, this move may help to strengthen the company's balance sheet by reducing reliance on short-term debt. This stability is particularly important for Waste Connections, given the capital-intensive nature of the waste management industry. However, the 4.5% interest rate on the new notes must be weighed against current market rates to ensure this refinancing is indeed beneficial.

For retail investors, understanding the implications of debt refinancing is crucial. It signals that the company is proactively managing its financial obligations, which can be a positive sign of prudent financial management. However, the precise impact on future earnings and cash flow will depend on the company's overall debt strategy and market conditions.

Market Research Analyst

The context of the waste management industry is vital in evaluating this senior notes offering. Waste Connections operates in a sector that requires substantial capital investments for infrastructure and regulatory compliance. By securing long-term financing through this note offering, the company can potentially stabilize its cash flow amidst fluctuating operational costs and market conditions.

Analyzing the market demand for waste services, Waste Connections' ability to serve nine million customers across multiple states and provinces indicates a robust market position. Leveraging funds from the notes offering to manage debt could allow the company to redirect more internal resources towards growth initiatives such as expanding recycling programs or enhancing renewable fuel projects, aligning with their ESG objectives.

The issuance of these notes also reflects on the current credit market confidence in Waste Connections. Investors should note the underwriters involved, such as CIBC Capital Markets, TD Securities and Scotiabank, which shows institutional support and adds credibility to the offering. For retail investors, this institutional backing can be a reassuring sign regarding the company's market standing and future growth prospects.

TORONTO, June 11, 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 in the U.S. and by way of private placement in each of the provinces of Canada (the "Offering") of C$500 million aggregate principal amount of its 4.50% Senior Notes due 2029 (the "Notes") at a price to the public of 99.933% of their face value. The Offering is expected to close on June 13, 2024, subject to customary closing conditions. Net proceeds to Waste Connections from the Offering are expected to be approximately C$495 million, after deducting underwriting fees and estimated Offering expenses, and are expected to be used to repay a portion of the Canadian dollar-denominated borrowings outstanding under its revolving credit facility provided under its credit agreement.

CIBC Capital Markets, TD Securities, and Scotiabank are acting as joint book-running managers and underwriters for the Offering along with the several other underwriters named in the underwriting agreement. The Offering is being made in the United States 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") and on a private placement basis in Canada to purchasers in each province of Canada under a Canadian offering memorandum (the "Canadian Offering Memorandum"), which includes the Registration Statement. Copies of the prospectus supplement and the accompanying base prospectus for the Offering and, in Canada, the Canadian Offering Memorandum, may be obtained by contacting CIBC World Markets Inc., 161 Bay Street, 5th Floor, Toronto, ON M5J 2S8, Attention: Debt Capital Markets, at cibcdebtsyndication@cibc.com or by telephone at 416-594-8515, TD Securities Inc., 222 Bay Street, 7th Floor, Toronto, ON M5K 1A2, Attention: Debt Capital Markets, at tdcan-syndicate@tdsecurities.com or by telephone at 416-982-2243, or Scotia Capital Inc., 40 Temperance Street, 4th Floor, Toronto, ON M5H 3Y2, Attention: Debt Capital Markets, at dcmtoronto@scotiabank.com or by telephone at 416-863-7776. 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 46 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 prospectus supplement and the accompanying base prospectus, which are both a part of the Registration Statement, 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 amount of Waste Connections' recent Senior Notes offering?

Waste Connections has announced a C$500 million offering of 4.50% Senior Notes due 2029.

When is the closing date for the Waste Connections Senior Notes offering?

The offering is expected to close on June 13, 2024.

What will Waste Connections use the proceeds from the Senior Notes offering for?

The proceeds, approximately C$495 million after fees, will be used to repay part of the company's Canadian dollar-denominated revolving credit facility.

Who are the underwriters for Waste Connections' Senior Notes offering?

CIBC Capital Markets, TD Securities, and Scotiabank are among the joint book-running managers and underwriters.

What is the interest rate for Waste Connections' newly issued Senior Notes?

The Senior Notes carry an interest rate of 4.50%.