Covanta Announces 335 Million Tax-Exempt Debt Offering
Refinancing of Existing Project Debt at Covanta's Haverhill, Niagara, and SEMASS Facilities
MORRISTOWN, NJ, Nov 07, 2012 (Menafn - MARKETWIRE via COMTEX) --Covanta Holding Corporation CVA ("Covanta" or the "Company")announced that it has priced new tax-exempt bonds totaling 335million. The offerings are expected to close later in the month.Proceeds from the offerings will refinance existing tax-exemptproject debt at its Haverhill, Niagara and SEMASS facilities, as wellas to fund certain capital expenditures in Massachusetts.
Key transaction benefits include:
--Significantly extends weighted average life of refinanced debt from
less than 3 years to over 27 years;
--Reduces average interest rates by over 50 basis points as compared to
refinanced debt;
--Releases over 30 million of cash from restricted funds, net of
offering expenses, for immediate corporate use;
--Frees up approximately 250 million of additional cash flow over the
next 5 years that would have been required for scheduled project debt
repayment or redemption; and
--Enhances collateral for the benefit of Covanta Energy lenders.
"We are capitalizing on favorable conditions in the debt markets, aswell as the fact that debt investors were very receptive to theoffering given our strong track record of consistent operations andsteady cash flow generation. By replacing secured project debt withunsecured corporate level debt, this transaction will enhance ourfinancial flexibility and further simplify our capital structuregoing forward," said Brad Helgeson, Covanta Vice President andTreasurer.
Details of the new issues are as follows (dollars in millions):
SeriesAmountTenorCouponUse of Proceeds
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Massachusetts20154.875%New proceeds for qualifying
Series 2012Acapex in Massachusetts
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Massachusetts67304.875%Refund SEMASS project debt
Series 2012B
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Massachusetts82305.25%Refund Haverhill project debt
Series 2012C
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Niagara130305.25%Refund Niagara project debt
Series 2012A
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Niagara35124.00%Refund Niagara project debt
Series 2012B
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Total / Weighted335275.02%
Average
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"I am very excited about this refinancing that will achieve so manyattractive benefits for the Company, including significantlyextending maturities, lowering interest cost and freeing up cashflow," said Sanjiv Khattri, Covanta's Executive Vice President andCFO. "By refinancing and extending the maturities of this debt, wewill free up over 280 million of cash over the next five years thatotherwise would have been required for scheduled debt repayments andredemptions or trapped in restricted funds. This additional cash cannow be redirected over the next five years in accordance with ourstated capital allocation policy, which includes both investing forgrowth and shareholder returns."
The new bonds will be obligations of Covanta Holding Corporation andguaranteed by Covanta Energy Corporation, and will not be secured byproject assets. The Massachusetts Series 2012A and 2012C bonds andthe Niagara Series 2012A bonds will be subject to Alternative MinimumTax (AMT), while the Massachusetts Series 2012B and Niagara Series2012B bonds will not be subject to AMT.
The new bonds to be issued will not be registered under theSecurities Act of 1933, as amended, and will not be offered or soldin the United States absent registration or an applicable exemptionfrom registration requirements.
Bank of America Merrill Lynch is acting as lead manager on thetransaction. Barclays, Guggenheim Securities and TD Securities areacting as co-managers.
About Covanta Covanta Holding Corporation CVA is aninternationally recognized owner and operator of large-scaleEnergy-from-Waste and renewable energy projects and a recipient ofthe Energy Innovator Award from the U.S. Department of Energy'sOffice of Energy Efficiency and Renewable Energy. Covanta's 44Energy-from-Waste facilities provide communities with anenvironmentally sound solution to their solid waste disposal needs byusing that municipal solid waste to generate clean, renewable energy.Annually, Covanta's modern Energy-from-Waste facilities safely andsecurely convert approximately 20 million tons of waste into 9million megawatt hours of clean renewable electricity andapproximately 9 billion pounds of steam that are sold to a variety ofindustries. For more information, visit www.covantaenergy.com.
Cautionary Note Regarding Forward-Looking Statements Certainstatements in this press release may constitute "forward-looking"statements as defined in Section 27A of the Securities Act of 1933(the "Securities Act"), Section 21E of the Securities Exchange Act of1934 (the "Exchange Act"), the Private Securities Litigation ReformAct of 1995 (the "PSLRA") or in releases made by the Securities andExchange Commission ("SEC"), all as may be amended from time to time.Such forward-looking statements involve known and unknown risks,uncertainties and other important factors that could cause the actualresults, performance or achievements of Covanta and its subsidiaries,or general industry or broader economic performance in global marketsin which Covanta operates or competes, to differ materially from anyfuture results, performance or achievements expressed or implied bysuch forward-looking statements. Statements that are not historicalfact are forward-looking statements. Forward-looking statements canbe identified by, among other things, the use of forward-lookinglanguage, such as the words "plan," "believe," "expect,""anticipate," "intend," "estimate," "project," "may," "will,""would," "could," "should," "seeks," or "scheduled to," or othersimilar words, or the negative of these terms or other variations ofthese terms or comparable language, or by discussion of strategy orintentions. These cautionary statements are being made pursuant tothe Securities Act, the Exchange Act and the PSLRA with the intentionof obtaining the benefits of the "safe harbor" provisions of suchlaws. Covanta cautions investors that any forward-looking statementsmade by Covanta are not guarantees or indicative of futureperformance. Important assumptions and other important factors thatcould cause actual results to differ materially from thoseforward-looking statements with respect to Covanta, include, but arenot limited to, the risk that Covanta may not successfully grow itsbusiness as expected or close its announced or planned acquisitionsor projects in development, and those factors, risks anduncertainties that are described in periodic securities filings byCovanta with the SEC. Although Covanta believes that its plans,intentions and expectations reflected in or suggested by suchforward-looking statements are reasonable, actual results coulddiffer materially from a projection or assumption in anyforward-looking statements. Covanta's future financial condition andresults of operations, as well as any forward-looking statements, aresubject to change and to inherent risks and uncertainties. Theforward-looking statements contained in this press release are madeonly as of the date hereof and Covanta does not have or undertake anyobligation to update or revise any forward-looking statements whetheras a result of new information, subsequent events or otherwise,unless otherwise required by law.
SOURCE: Covanta Holding Corporation
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