Last month, Rutland, Vt.-based Casella Waste Systems held a meeting with prospective lenders to discuss a potential debt refinancing. Casella considered entering into a new term loan B facility in an amount of about $350 million and a revolving line of credit facility in an amount of approximately $150 million.
Last week, Casella released an update on its debt refinancing status: Bank of America Merrill Lynch has advised Casella that certain financial institutions and other investors have provided commitments to fund a new term loan B facility in the amount of $350 million priced at 99.50 percent of the principal amount. In addition to that, the investors and institutions have committed to funding a revolving line of credit facility in the amount of $160 million, which is slightly above what Casella was originally considering. Upon closing, the term loan B facility is expected to have a 7-year term with an interest rate of LIBOR plus 3.00 percent per annum, and the credit facility is slated to be completed on October 17, 2016.
Casella is planning on using the credit facility funds for the redemption of its outstanding 7.75 percent Senior Subordinated Notes due 2019, repayment in full of its existing senior secured asset-based revolving credit and letter of credit facility, transaction-related fees and expenses, working capital and other purposes.
The total cost of this transaction will be approximately $15 million, and the total annual interest savings is expected to be about $11 million, according to a press release.