Casella Waste Systems broke into the secondary market last week with traders quoting the company's new "B" piece in the 100 3/8-100 3/4 range. Small pieces changed hands in that context. The new facility consists of a $175 million revolver and a $150 million term loan "B" (see story, page 3). The company is also completing a $150 million offering of 93/ 4% senior subordinated notes due 2013.
Dealers said investors liked the name because it adds a sector alternative to Allied Waste Industries. One dealer, comparing the two companies, noted that Casella was far less levered and less cyclical than Allied because of its focus on the residential market rather than the industrial market. A trader also noted the relative stability of the smaller Casella. One buysider, however, explained that Casella had more vertical integration issues than Allied. "One of the reasons for this transaction is for future growth," said Richard Norris, senior v.p., cfo and treasurer of Casella. He explained that the new bank and bond deals would provide additional capacity for the company to acquire more disposal sites and furthermore boost internalization figures. Allied's "B" term loan is currently quoted in the 99 3/8 99 7/8 range, according to LoanX.