Covanta details $3.44 billion debt commitment for buyout by EQT

By Sara Rosenberg

New York, Sept. 2 – Covanta Holding Corp. plans on getting $1.815 billion of credit facilities (BB) and has a commitment for a $1.625 billion senior unsecured bridge facility to help fund its acquisition by EQT Infrastructure for $20.25 per share and refinance existing debt, according to a DEFM14A filed with the Securities and Exchange Commission on Thursday.

The credit facilities consist of an up to $440 million revolver, a $1.275 billion senior secured term loan B, which includes a $400 million backstop delayed-draw term sub-facility, and a $100 million senior secured term loan C for cash collateralizing existing letters of credit.

In prior filings, the company outlined the term loan B and term loan C total size at $1.5 billion and the bridge loan size at $1.5 billion.

The bridge loan includes a $1.1 billion backstop delayed-draw bridge sub-facility.

The backstop delayed-draw term loan and backstop delayed-draw bridge facility are expected to fund the repurchase price of any change-of-control offer required to be made under the indentures governing the company’s existing debt securities.

Covanta plans to issue senior notes to replace the bridge facility.

Barclays, Credit Suisse, TD Securities (USA) LLC, BNP Paribas Securities Corp., Credit Agricole CIB, Goldman Sachs Bank USA, RBC Capital Markets, Citigroup Global Markets Inc., Stifel, MUFG, Fifth Third Bank and Citizens Bank provided the debt commitment.

Other funds for the transaction will come from $2.178 billion of equity.

Closing is expected in the fourth quarter, subject to Covanta shareholder approval and customary government approvals.

Covanta is a Morristown, N.J.-based provider of sustainable waste and energy solutions.

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