S&P may cut Republic, up Allied Waste

Standard & Poor's said it placed the BBB+ long-term and A-2 short-term corporate credit ratings on Republic Services Inc. on CreditWatch with negative implications and placed the BB corporate credit rating on Allied Waste Industries Inc. on CreditWatch with positive implications.

The actions followed the confirmation that Republic and Allied are discussing a possible merger, according to S&P.

A combined entity would benefit from a strong business profile, significant scale of operations, a high level of integration of services in the industry and good geographic and customer diversity, the agency said.

On a standalone basis, Republic Services' business profile benefits from revenue from the southern and western United States, which have attractive demographics and substantial revenue from franchise markets and small and midsize markets, S&P said.

Allied Waste's leading market positions, its initiatives to lower costs and improve efficiency, ongoing price increases have been supported by management's commitment to reduce debt leverage, the agency noted.

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