Covanta to price $400 million 8.25-year notes in Wednesday drive-by; initial talk 6% area

By Paul A. Harris

Portland, Ore., Oct. 3 – Covanta Holding Corp. plans to price a $400 million offering of 8.25-year senior notes (B1/B) in a Wednesday drive-by, according to market sources.

Initial price talk has the deal coming in the 6% area.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Credit Agricole CIB, Citizens Capital Markets, Inc., MUFG and SMBC Nikko are joint bookrunners for the public offering.

The notes come with 3.25 years of call protection.

The Morristown, N.J.-based sustainable waste management and energy company plans to use the proceeds, along with cash on hand and/or direct borrowings under Covanta Energy, LLC's revolving credit facility, to redeem all of its 6 3/8% senior notes due 2022 on Nov. 2, 2018, prior to which a portion of the proceeds will be used to repay $202 million under the revolving credit facility, with the remainder to go into short-term interest-bearing accounts, securities or similar investments.

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