Improvements in the loan market drove Waste Connections to increase the size and decrease the interest rate on its "B" loan. In the fall, the company took out a $175 million "B" loan at LIBOR plus 2%. The new amendment increases the "B" loan to $200 million and cuts pricing by 25 basis points to LIBOR plus 13/4%. "It was an opportunity that was identified and everyone moved quickly to take advantage of it," said Worthing Jackman, v.p. of finance and investor relations. "It seems like conditions had improved since the fall that provided an opportunity to reprice it. We are taking advantage of the strength of the market."
Fleet Securities and Deutsche Bank lead the facility and most existing investors rolled over. "No one ever likes being repriced down, but all, if not almost all, of the investors rolled," Jackman said. "I believe everyone stepped up and held their position and new lenders were brought in or existing lenders stepped up for additional capacity in order to accommodate the additional $25 million." The amendment also put in place one-year call protection.
The facility also includes a $400 million revolver, of which $53 million is drawn. The spread on the revolver is based on a grid tied to leverage and is currently priced at LIBOR plus 2%. The revolver was not affected by the amendment. "The additional $25 million that we upsized was used to pay down revolver borrowings," Jackman said. Waste Connections provides solid waste collection, transfer, disposal and recycling services.