Covanta sets investor call for $300M of 8-year sustainability-linked notes

An investor call is scheduled for tomorrow, Nov. 16, at 10:30 a.m. ET for Covanta Holding Corp.'s proposed $300 million of eight-year (non-call three) senior unsecured sustainability-linked notes, according to sources. Pricing is expected thereafter via Credit Suisse (left lead), Barclays, BNP Paribas, Citigroup, Citizens, Credit Agricole, Fifth Third, Goldman Sachs, MUFG, RBC Capital Markets, Stifel and TD Securities.

Proceeds, together with those from a $1.335 billion sustainability-linked term loan B and the $100 million sustainability-linked term loan C, will be used to back the buyout of the company by EQT Infrastructure and to refinance existing floating- and fixed-rate debt.

Covanta provides sustainable waste and energy solutions. Corporate issuer ratings are B+/Ba3. The new notes will be structured with a first call at par plus 50% of the coupon, as well as an up-to-40% equity claw during the non-call period.

Covanta's most recent bond market tap was completed in August 2020 and finalized as $400 million of 5% senior notes due September 2030. Trade data show the notes closed the session Nov. 12 at 100.125% of par, yielding 4.98%. Existing unsecured debt ratings are B/B1.

S&P Global Ratings said Nov. 5 the company's "minor changes to its proposed refinanced capital structure are neutral for credit quality."