CTBH Partners LLC Announces Successful Remarketing of $25.0 million of Solid Waste Industrial Revenue Bonds for Casella Waste...
December 03 2019 - 7:30AM
CTBH Partners LLC (“CTBH”) is pleased to announce the closing of
$25.0 million aggregate principal amount of tax-exempt solid waste
industrial revenue bonds for its client, Casella Waste Systems,
Inc. (“Casella”) (Nasdaq: CWST). As financial advisor to the
borrower, CTBH represented Casella in the remarketing of its New
York State Environmental Facilities Corporation (the “Issuer”)
Solid Waste Disposal Revenue Bonds (Casella Waste Systems, Inc.
Project) Series 2014 (the “Bonds”). The Bonds, rated “B” by S&P
Global Ratings and “B2” by Moody’s Investor Service, were
remarketed at an interest rate of 2.875% per annum on December 2,
2019 for 10 years. BofA Securities, Inc. served as the remarketing
agent on the transaction.
The Bonds were originally issued on December 18, 2014 and have a
final maturity date of December 1, 2044. The fixed term interest
rate period under which the Bonds were previously issued expired.
Accordingly, the Bonds were remarketed on December 2, 2019. The
Bonds are payable solely from amounts received from Casella under
the indenture and are not a general obligation of the Issuer, nor
are they a debt or pledge of the faith and credit of the State of
New York.
Overview of Private
Activity Bonds
Since 1968, private companies and nonprofit organizations have
been able to finance qualifying projects by borrowing the proceeds
of tax-exempt private activity bonds (“PABs”) issued through a
conduit issuer as an alternative to traditional corporate debt.
PABs are municipal bonds issued by or on behalf of local or state
governments for the purpose of providing special financing benefits
for qualified private projects that serve a public purpose,
including solid waste disposal facilities. Other qualifying
activities under the Internal Revenue Code include airports, docks
& wharves, sewage treatment facilities, local district heating,
highway or surface freight transfer facilities, and qualified
501(c)(3) capital expenditures.
Solid waste PABs are sometimes also referred to as industrial
revenue bonds (or “IRBs”). In the context of IRBs, the Internal
Revenue Code defines solid waste disposal facilities as “any
property or a portion thereof used for the collection, storage,
treatment, utilization, processing, or final disposal of solid
waste”. Recycling facilities can also qualify in many cases.
The benefits of PABs include (i) potentially significant
interest rate saving due to the tax-exempt status of the bonds,
(ii) potentially longer-term debt than otherwise available, (iii)
access to an additional pool of investor capital, and (iv) flexible
financing structures. However, to receive these benefits, the
borrower needs to comply with various federal and state regulatory
requirements that may result in smaller bond issuances and a more
involved bond issuance process (with pre- and post-issuance
compliance requirements) than traditional corporate debt.
Nevertheless, the use of PABs is wide spread across multiple
industries by publicly traded and privately held companies as well
as nonprofit organizations.
Industry-wise, the issuance of tax-exempt PABs are most
prevalent with (i) healthcare facilities, (ii) colleges and
universities, (iii) electric utilities, (iv) oil & gas
companies, (v) airlines, as well as (vi) environmental control
companies. Collectively, organizations in these industries have
approximately $400 billion in tax-exempt PABs outstanding.
About Casella Waste Systems
Casella Waste Systems, Inc., headquartered in Rutland, Vermont,
provides solid waste management services consisting of collection,
transfer, disposal, and recycling services in the northeastern
United States.
About CTBH Partners
CTBH Partners LLC is a top-ranked independent financial advisory
firm to the environmental sector specializing in tax-exempt debt
offerings for companies with qualifying capital expenditures. CTBH
is registered as a Municipal Advisor with the Municipal Securities
Rulemaking Board and the U.S. Securities and Exchange Commission.
CTBH does not engage in any form of underwriting, trading,
marketing, or investing in securities.
Since inception, CTBH has provided its consulting services to
borrowers on over $200 million of tax-exempt solid waste industrial
revenue bonds across six states. For further information, visit the
company’s website at https://ctbhpartners.com.
Transaction Contact:John RuthManaging
Partner603.667.3439jruth@ctbhpartners.com
Media Contact:Abbie
Montgomerymedia@ctbhpartners.com
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