Waste Recycling, the UK waste management company, is putting together a high-yield bond offering. Terra Firma Investments purchased the business last year backed by £530m in buyout financing led by Barclays and Merrill Lynch. Proceeds from the new deal are expected to refinance outstanding debt and pay a dividend to the sponsor.
Deutsche Bank, Barclays Capital and Merrill Lynch are running the new deal, which is expected to include circa £250m of senior notes. There is also likely to be a second lien tranche of roughly the same amount. Rumours of a new senior loan, which were rife a few weeks ago, are receding fast.
Debt backing the buyout was split between £330m in senior debt, to support the buyout, and a £200m environmental agency bonding facility. Senior debt comprised a £140m seven-year term loan A at 225bp over Libor, a £70m eight-year term loan B at 275bp, a £70m nine-year term loan C at 325bp and a £50m seven-year revolver at 225bp with a 75bp commitment fee. The seven-year bonding facility is priced at 225bp.