Moody’s lifts Republic, Browning-Ferris to positive

Moody's Investors Service said it affirmed the Baa3 senior unsecured rating of Republic Services, Inc. and its subsidiary, Browning-Ferris Industries, LLC, and changed both outlooks to positive from stable.

The outlook revision reflects an expectation that Republic will sustain and improve upon its steady performance over the past couple of years as the EBITDA margin remained in the upper 20% range, while free cash flow reached an all-time high in 2016, Moody’s explained.

Continued focus on its core strengths, good pricing discipline and cost controls and strong customer service have helped Republic capitalize on favorable key industry drivers, the agency added.

The Baa3 senior unsecured rating recognizes Republic's national footprint in the U.S. solid waste sector, its predictable revenue stream, strong EBITDA margin at more than 28% and solid free cash flow profile, Moody’s said.

The positive outlook also reflect expectations of steady top-line and EBITDA growth over the next 12 to 18 months, similar to 2016's level, the agency said.

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