Waste Pro Receives First Credit Rating from Fitch

Waste Pro Receives First Credit Rating from Fitch, Aims for Growth and Refinancing

Waste Pro, the fastest-growing private waste company in the Southeast, has received its first credit rating from Fitch. The company was given a long-term issuer default rating of B+ by Fitch, highlighting Waste Pro’s established position in the region with multi-year service contracts and a selective contract bidding process.

Despite the positive rating, Fitch also noted some challenges for Waste Pro, including its smaller scale of cash flow relative to investment opportunities and its regional focus on collection services, which exposes it to weather factors and local competition.

The new credit rating comes as Waste Pro aims to refinance about $480 million in debt before certain bonds mature in 2026. Executive Vice President and CFO Cort Sabina stated that the company has been rated by S&P and Moody’s since 2017 when it launched its first high-yield bond offering.

In addition to the B+ default rating, Fitch also assigned ratings to Waste Pro’s asset-based lending and senior unsecured bonds. The company’s mostly fixed-rate debt mix benefits from tax-exempt bonds, but it faces upcoming debt maturities in the coming years.

Waste Pro’s stability is attributed to its focus on residential and commercial waste collection services, which account for 73% of its revenue. The company’s municipal contracts, ranging from five to 10 years, also contribute to its stability.

Looking ahead, Waste Pro plans to prioritize growth in 2024, with $65 million already spent on acquisitions and an expected total spending of $100 million for the year. The company’s capital spending is mainly focused on truck and container purchases, with an estimated capex budget of $140 million for 2024.

Fitch expects Waste Pro to continue its growth trajectory, with a focus on acquisitions and capital expenditures. The company’s strategic pricing strategy and disposal options are seen as factors that could help it achieve its financial goals in the coming years.