Moody's: Casella view negative

Moody's Investors Service said it affirmed Casella Waste Systems, Inc.'s corporate family and probability-of-default ratings at B1 and senior subordinated rating at B3 (LGD5, 84% from 83%).

The outlook was changed to negative from stable.

The outlook change follows the declining trend in the EBIT margin, which has caused interest coverage and leverage metrics to weaken, the agency said.

"There is also uncertainty of whether Casella's current strategy of reducing growth capital investment will free up enough cash flow to simultaneously cover working capital needs including payments for capping, closure and post-closure obligations and to de-lever the capital structure," Jonathan Root, Moody's analyst, said in a written statement.

Ratings reflect leading positions in many of the company's markets and minimal exposure to economic cycles, the agency said.

Ratings also reflect a debt-to-EBITDA ratio of about 5 times, Moody' said.

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