Moody's rates Clean Harbors loan

Moody's Investors Service said it confirmed the existing ratings of Clean Harbors Inc. with a stable outlook. At the same time, Moody's assigned the following prospective ratings to the following proposed debt: $30 million guaranteed senior secured revolver maturing in 2009, rated prospective B1; $90 million guaranteed senior secured synthetic letter-of-credit facility due 2009, rated prospective B2; and $150 million guaranteed second-lien senior notes due 2012, rated prospective B3.

The outlook is stable.

Moody's said the confirmed ratings reflect the low free cash flow generation of the company, both for the last 12-month period ended March 31, measured as cash from operations less capex, and pro forma for the transaction for the same period. In addition, the weak history of operating earnings and low single digit EBIT return on assets do not yet reflect an adequate return to justify the assumption of significant deferred cash environmental liabilities from the acquisition of certain assets of the Chemical Services Division of Safety-Kleen Corp. in 2002.

The ratings also incorporate the progress the company has made in the achievement of a large portion of planned cost reductions from the Chemical Services integration and reducing expected cash outlays via active management of its environmental liabilities portfolio.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.