Moody's rates Covanta notes Ba3, loan Ba1

Moody's Investors Service said it affirmed Covanta Holdings Corp.'s corporate family and probability of default ratings at Ba2, senior unsecured notes at Ba3 and speculative-grade liquidity rating at SGL-1.

The agency also said it assigned a Ba3 rating to the company's planned issuance of senior unsecured notes, along with a Ba1 rating to the planned $900 million secured revolver and $300 million secured term loan to be issued by Covanta Energy Co., a Covanta subsidiary.

The outlook remains stable.

The ratings recognize the continuation of relatively consistent credit metrics supported by a diversified, largely contracted portfolio of energy-from-waste projects principally located throughout the United States, Moody's said.

These strengths are mitigated by the highly leveraged capital structure that remains in place, the agency said, as well as the degree of structural subordination that exists at the Covanta level.

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