Moody's assigns Covanta loans Ba1

Moody's Investors Service said it assigned Ba1 ratings to Covanta Holding Corp. new $1.335 billion senior secured first-lien term loan B facility and $100 million senior secured term loan C facility.

The new facilities are part of Covanta’s recapitalization under EQT Infrastructure ownership. Covanta and EQT announced on July 14, that EQT will acquire the company for about $5.3 billion, with the deal’s closing expected later this month.

"We expect Covanta's key credit drivers of highly contracted revenues, increased diversification and organic growth to remain the same under the ownership of EQT," stated Jairo Chung, a Moody's analyst, in a press release. "Although Covanta will carry approximately $600 million of additional debt on its balance sheet, the recapitalization does not materially change the company's overall credit profile," added Chung.

The outlook is stable.

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