Clean Harbors will likely be required to buy back some notes

By Susanna Moon

Chicago, May 12 - Clean Harbors Inc. expects to be required to offer to buy back its senior secured notes for half of its excess cash flow generated during the 12-month period ending June 30, according to a 10-Q filing with the Securities and Exchange Commission.

Payment for the notes would be 104 plus accrued interest. The company would be required to repurchase the notes within 120 days after June 30.

Clean Harbors said it is required by certain note covenants to apply half its yearly excess cash flow to redeem first-lien loans under its revolving facility and synthetic facility or to make offers for its outstanding senior secured notes.

For the nine months ended March 31, excess cash flow was $28.1 million.

At March 31, the market price of the senior secured notes exceeded the amount at which the company is required to make excess cash flow offers for outstanding senior secured notes, the filing said.

Holders may therefore not accept an excess cash flow offer unless the trading price of the senior secured notes falls before the time in 2008 at which Clean Harbors will be required to make such an offer, according to the filing.

Clean Harbors is a Braintree, Mass., provider of environmental and hazardous waste management services.

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