S&P cuts Republic Services, ups Allied Waste from junk

Standard & Poor's said it lowered Republic Services Inc.'s corporate credit rating to BBB from BBB+ and the senior unsecured debt to BBB from BBB+ and short-term obligations to A-3 from A-2.

The agency raised the corporate credit rating on Allied Waste Industries Inc. to BBB from BB and Allied Waste North America Inc.'s senior debt rating to BBB from BB and B+ and raised the ratings on Allied Waste Industries' subordinated debt to BBB- from B+.

Ratings were removed from CreditWatch, where they were placed on June 16.

The outlook is negative.

"The downgrade on Republic and negative outlook on both companies reflect our view that Republic's financial risk profile - marked by higher debt leverage - will deteriorate after its impending acquisition of Allied Waste, more than offsetting the benefits to Republic's business risk profile," S&P analyst James Siahaan said in a statement.

The actions anticipate the imminent closing of Republic's acquisition of Allied Waste in a stock deal worth $11 billion including assumed Allied debt.

The actions also reflect increased leverage and a more aggressive financial risk profile in the near term following the combination, the agency noted.

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