Covanta Holding Corp. Announces Tax Exempt Bond Refinancing

8/24/20

Covanta Holding Corporation (NYSE: CVA) today announced that it has entered into a loan agreement with the National Finance Authority (New Hampshire) under which they agreed to issue $129.4 million in new tax exempt bonds to refinance certain outstanding bonds issued in 2015. The Series 2020 bonds bear interest at a weighted average coupon of 3.71% and are subject to mandatory tender for purchase in 2040. The new bonds are unsecured obligations of Covanta Holding Corporation and are not guaranteed by any of our subsidiaries, whereas the refunded bonds were guaranteed by our subsidiary, Covanta Energy LLC. Descriptions of both series of bonds are listed below.

The transaction lowers the weighted average coupon on the bonds by over 145 basis points, and as a result of the removal of our subsidiary guarantee, also reduces the leverage ratio under our senior secured credit facilities on a pro forma basis.

"Covanta remains focused on optimizing its capital structure and this transaction represents another opportunistic action to lower our cost of debt while maintaining an attractive term structure," said Bradford J. Helgeson, Covanta's CFO. "This transaction, when combined with our recently announced taxable bond refinancing, results in annual cash interest savings of over $5 million."

Description of the Series 2020 bonds

  • $39,405,000 3.625% National Finance Authority (New Hampshire) Resource Recovery Refunding Revenue Bonds (Covanta Project) Series 2020A (Non-AMT) due July 1, 2043;
  • $90,000,000 3.75% National Finance Authority (New Hampshire) Resource Recovery Refunding Revenue Bonds (Covanta Project) Series 2020B (AMT) (Green Bonds) due July 1, 2045.

Description of the refunded bonds

  • $39,405,000 5.00% Delaware County Industrial Development Authority Refunding Revenue Bonds (Covanta Project), Series 2015A due July 1, 2043;
  • $90,000,000 5.25% Essex County Improvement Authority Solid Waste Disposal Revenue Bonds (Covanta Project) Series 2015 due July 1, 2045.

About Covanta

Covanta is a world leader in providing sustainable waste and energy solutions. Annually, Covanta's modern Energy-from-Waste facilities safely convert approximately 21 million tons of waste from municipalities and businesses into clean, renewable electricity to power one million homes and recycle 500,000 tons of metal. Through a vast network of treatment and recycling facilities, Covanta also provides comprehensive industrial material management services to companies seeking solutions to some of today's most complex environmental challenges. For more information, visit covanta.com.