Republic Services says bond sale successful, cites upsizing, pricing

By Andrea Heisinger

New York, March 3 - Republic Services Inc.'s $1.5 billion bond issue that priced in two tranches earlier in the week went well, the company said Wednesday, citing the upsizing of the issue and a price that came inside of guidance.

Ed Lang, the Phoenix-based waste management company's senior vice president and treasurer, said that they "did better on the spread over Treasuries than expected."

He complimented the bookrunners for this, with the sale coming in at the tight end of price guidance. The $850 million of 10-year notes priced at 140 bps over Treasuries and were talked in the 145 bps area. A $650 million tranche of 30-year bonds priced at 165 bps over Treasuries and also came tight to talk in the 170 bps area.

The deal was done on March 1.

Lang called the deal "significantly oversubscribed" and said that the size was increased by $250 million because of this. The 10-year tranche was initially $750 million, and the 30-year tranche was $500 million, he said.

Both tranches were "five to six times" oversubscribed, giving the company the flexibility to price the deal tighter than guidance and the company's outstanding bonds in the secondary, Lang said.

"You don't have too many deals that price inside the secondaries," he said.

Of the proceeds from the sale, $1.25 billion will be used to refinance legacy debt from the company's merger with Allied Waste Industries Inc., with notes due 2014 and 2015 being called.

The extended maturities allowed by the new bonds will aid the company.

Lang called the deal a "win-win situation."

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