WCA Waste marketing $150 million eight-year deal, pricing seen next week

By Paul Deckelman

New York, June 20 - WCA Waste Corp. began marketing its previously announced offering of $150 million of eight-year senior notes Tuesday. A company executive told Prospect News that the roadshow to prospective investors had begun, and that the deal is expected to price around the middle of next week.

However, Thomas J. Fatjo III, the company's senior vice president of finance, declined to provide further specifics as to the structure of the deal, likely investment bank involvement or use of proceeds, citing the deal's status as a Rule 144A/Regulation S private placement.

WCA, a Houston-based solid waste disposal company, announced late Monday that it planned to offer the notes for sale.

The sale of the notes is the latest of several moves by the company to improve its capital structure. Last week, it announced that Ares Corporate Opportunities Fund II had made a $75 million convertible preferred equity investment in the company, receiving securities convertible into stock at $9.60 per share, with a 5% paid-in-kind dividend.

WCA said at that time that it was also pursuing additional transactions to refinance its existing senior secured debt. On Monday, it said in a filing with the Securities and Exchange Commission that it was arranging a new $100 million five-year revolving credit facility via Comerica Bank as part of the recapitalization plan.

WCA further said at the time of the Ares deal that - assuming that the equity investment and the other transactions close - it anticipates that its debt-to-total capitalization ratio, net of cash, would be reduced from 66% before the transactions, based on its pro forma financial information as of March 31, 2006, to 40% afterward, while its equity would increase to $167 million from $94 million.

It said that the issuance of the preferred stock would be subject to stockholder approval, the refinancing of senior debt and other customary conditions.

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