Moody's ups Waste Services to B2

Moody's Investors Service said it upgraded the corporate family rating to B2 from B3 and assigned a speculative grade liquidity rating of SGL-3 to Waste Services, Inc. The agency also affirmed the Ba3 rating on the proposed amended senior secured credit facilities, along with the Ba3 (LGD3, 31%) rated $60 million senior secured revolving credit facility due 2009, the Ba3 (LGD3, 31%) rated (upsized) $295 million senior secured term loan facility due 2011 and the Caa1 (LGD5, 84%) rating on $160 million senior subordinated notes due 2014.

The outlook is stable.

The action was prompted by the recent redemption of the company's mandatorily redeemable preferred shares through an equity offering and ongoing operational initiatives to increase internalization and reduce costs, the agency said.

The upgrade reflects a more sustainable capital structure following the refinancing of the mandatorily redeemable preferred stock tranche and ongoing improvements to the company's asset configuration in Florida through acquisitions, Moody's said. The upgrade also recognizes continuing revenue and cost management efforts, the agency added.

The ratings continue to be constrained by the company's high pro forma adjusted leverage and weak free cash flow generation. Other constraints include elevated levels of capital expenditures, exposure to a slowdown in the construction cycle, fuel cost fluctuations and labor market conditions, the agency said.

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