Casella Waste Systems' $150 million "B" loan blew out after launching last Tuesday, prompting lead banks, Bank of America and FleetBoston Financial, to slap LIBOR plus 31/ 4% pricing on the institutional piece. That pricing was the low end of the previous LIBOR plus 31/ 4-31 /2% price talk range, said a banker familiar with the deal. The $325 million credit also includes a $175 million revolver with pricing at LIBOR plus 3%. "We're trying to position our balance sheet," said Richard Norris, senior v.p., cfo and treasurer of Casella, declining to comment specifically on the blowout. Casella plans to use the proceeds from the credit and a concurrent note offering to repay its current facility. Norris also noted that the proceeds would go toward acquiring more disposal sites (see story, page 4). A B of A official declined to comment, while a Fleet banker did not return calls.
The Rutland, Vt.-based waste company also launched an offering for $150 million of 93/ 4% senior subordinated notes due 2013. This deal was shelved last July, forcing the credit facility to be pulled along with it, the banker explained. He noted that the credit had been syndicated at that time, but the new facility does not comprise the exact same pool of investors. Norris added that Casella wanted to give the bond and bank deals another shot now because the market is hot and the timing is good. He also said that Casella had expected all the financing to close by last Friday, as Loan Market Week went to press. Casella's previous bank debt reportedly consists of a December 1999 instituted $280 million revolver priced at LIBOR plus 21/ 2% and a $119.3 million "B" loan priced at LIBOR plus 4%.