S&P: ADS Waste on positive watch

S&P said it placed all of the ratings on ADS Waste Holdings Inc. on CreditWatch with positive implications, including its B corporate credit rating.

The CreditWatch placement follows news that the company commenced the initial public offering of 19.25 million shares of its common stock, S&P said.

The proceeds will be used to repay a portion of the company’s senior secured term loan B borrowings, the agency explained.

Pro forma for the IPO and debt repayment, S&P said it estimates the company's adjusted debt-to-EBITDA ratio will decrease to 5.5x as of June 30, compared with 6.4x prior to the debt reduction.

The company's financial sponsor Highstar Capital still will retain majority ownership after the offering, but S&P noted that the Canada Pension Plan Investment Board holds 18% of ADS Waste’s stock. This somewhat mitigates Highstar's aggressive financial policies, the agency said.

The watch will be resolved following the completion of the IPO and the partial repayment of the term loan, which is expected in the first half of October 2016, S&P said.

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