Fitch gives BBB to Waste Connections notes

Fitch Ratings said it assigned a BBB rating to Waste Connections Inc.'s $400 million issuance of seven-year and 10-year senior unsecured notes.

The issuer default rating is BBB.

The outlook is stable.

Note proceeds will be used to refinance existing debt and for general corporate purposes.

The company issued the notes in two tranches: $150 million in principal will mature on April 20, 2024 with an annual interest rate of 3.24% and $250 million in principal will mature on April 20, 2027 with an annual interest rate of 3.49%. The notes will rank pari passu with all current obligations under the company's 2016 Master Note Purchase Agreement and the company's senior unsecured credit facility.

Fitch said it expects Waste Connections’ pro forma total debt/EBITDA to be about 3 times for fiscal year 2017. The company has continued to successfully integrate the merger of Progressive Waste Solutions though reported leverage is currently temporarily elevated as the full contribution of Progressive has yet to be reflected in the financials.

The agency expects the new combined company to generate roughly $4 billion in revenue on a pro forma basis and an EBITDA margin of roughly 30%. It also expects at least $50 million in SG&A synergies.

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