Moody's lifts Casella Waste view to stable

Moody's Investors Service said it affirmed Casella Waste Systems, Inc.'s B3 corporate family and B3-PD probability of default ratings and revised the outlook to stable from negative.

The outlook revision follows the company's improved financial performance in recent quarters and an expectation for modest additional improvement through fiscal year-ending April 2015, Moody's said.

Moody's also affirmed the B2 ratings on the Maine Revenue bonds and Vermont Pollution Control bonds, along with the Caa1 (LGD 5, 73%) rating on its subordinated notes.

The ratings reflect the company's weak financial profile, including high leverage with a 6.2x adjusted debt-to-EBITDA ratio for the 12 months that ended Oct. 31, 2013, the agency said.

The company is regionally concentrated in New England and upstate New York and Pennsylvania, leaving the company vulnerable to local price competition and declines in demand for the company's solid waste collection and disposal services, Moody's added.

But, Moody's said it expects the heightened focus on developing relationships with waste collectors and the more aggressive sales effort will continue driving revenue and margin improvements through fiscal year-ending April 2015.

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