Deutsche Bank and Lehman Brothers are leading a $215 million facility for EnviroSolutions Real Property Holdings. The credit consists of a six-year, $40 million revolver priced at LIBOR plus 3 1/2% and a seven-year, $175 million term loan "B" which is expected to be priced around LIBOR plus 3 3/4% to 4%.
Proceeds from the "B" loan and $35 million of 12 1/2% senior subordinated notes are expected to be used to repay existing senior secured debt and provide about $98 million of cash to fund growth. Calls to EnviroSolutions were not immediately returned.
Moody's Investors Service assigned a B2 rating to both tranches. The company was started in 2003 and has grown through acquisitions; it recently acquired a landfill in Kentucky and is constructing a landfill in West Virginia. Lenny Ajzenman, v.p. and senior analyst at Moody's, said the ratings could be upgraded if the debt-to-EBITDA levels fall below four times and free cash from operations to total debt goes above 8%.
According to Moody's, pro forma revenues for 2004 were about $150 million and pro forma debt to revenues at Dec. 31 would have been about 1.4 times.