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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Casella Waste Systems, Inc.    CWST

CASELLA WASTE SYSTEMS, INC.

(CWST)
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CASELLA WASTE SYSTEMS INC : Entry into a Material Definitive Agreement (form 8-K)

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09/02/2020 | 04:46pm EDT
Item 1.01 Entry into a Material Definitive Agreement.
On September 2, 2020, Casella Waste Systems, Inc. (the "Company") completed a
financing transaction pursuant to which the Company incurred indebtedness in the
principal amount of $40.0 million. The transaction involved the issuance by New
York State Environmental Facilities Corporation (the "Issuer") of $40.0 million
aggregate principal amount of the aggregate $75.0 million of the Issuer's Solid
Waste Disposal Revenue Bonds (Casella Waste Systems, Inc. Project) Series 2020
(the "Bonds"). The Bonds were issued pursuant to the Indenture, dated as of
September 1, 2020, and entered into on September 2, 2020 (the "Indenture"),
between the Issuer and U.S. Bank National Association, as trustee (the
"Trustee"). The proceeds of the Bonds were loaned to the Company pursuant to a
Loan Agreement, dated as of September 1, 2020, and entered into on September 2,
2020 (the "Loan Agreement"), between the Issuer and the Company, to finance
and/or reimburse certain costs of certain capital projects in the State of New
York and to pay certain costs of issuance of the Bonds. The Loan Agreement
requires the Company to pay amounts from time to time owing with respect to the
Bonds. Additional Bonds (as defined in the Indenture) in an aggregate principal
amount which, together with the Bonds, does not exceed $75.0 million may be
issued under the Indenture and the proceeds thereof loaned to the Company,
subject to the terms and conditions of the Indenture and the Loan Agreement,
market conditions and other factors.
The Bonds were issued on September 2, 2020 in the initial term interest rate
period ending on September 1, 2025, bearing interest at the initial term
interest rate of 2.75% per annum, and will mature, subject to earlier optional
or mandatory tender, on September 1, 2050. After the end of the initial term
interest rate period, the Bonds may be converted to a variable (daily or weekly)
interest rate period or to a new term interest rate period.
On September 2, 2025, and any other conversion date and on certain other dates
specified in the Indenture, each holder of the Bonds is required to tender the
Bonds held by it for purchase and the Bonds are required to be purchased. BofA
Securities, Inc., as remarketing agent for the Bonds (the "Remarketing Agent"),
is required (except as otherwise provided in the Remarketing Agreement between
the Company and the Remarketing Agent) to use its best efforts to remarket any
Bonds tendered for purchase. Funds for the payment of the purchase price of any
Bonds so purchased will be paid from the proceeds of any such resale or, to the
extent such funds are insufficient, from the proceeds of a letter of credit, if
the Bonds bear interest at a variable interest rate and are supported by a
letter of credit at such time, or from payments made by the Company pursuant to
the Loan Agreement or by the guarantors named in the Guaranty (as hereinafter
defined).
The Loan Agreement contain standard representations, covenants and events of
default for transactions of this type. Events of default under the Loan
Agreement include a failure to make any loan payment or purchase price payment
when due and the failure to observe and perform other covenants, conditions, or
agreements under the Loan Agreement or related note that continues for a period
of 60 days after notice. The Company's indebtedness under the Loan Agreement may
be accelerated upon the occurrence of an event of default. Additionally, while
any Bonds are in a term interest rate period and are not supported by a letter
of credit, (i) a change of control would require the Company to offer to
repurchase the Bonds and (ii) the obligations under the Bonds can be accelerated
if (a) the Company's obligations under its senior credit facility have been
accelerated or (b) if such obligations have been discharged, the Company's
obligations under any indebtedness in the principal amount of $10.0 million or
more have been accelerated.
The Bonds (as long as they are in a term interest rate period) are guaranteed by
substantially all of the subsidiaries of the Company pursuant to a Guaranty
Agreement, dated as of September 1, 2020, and entered into on September 2, 2020,
jointly and severally by and among the guarantors party thereto and the Trustee
(the "Guaranty"). Pursuant to the Guaranty, each guarantor will guarantee to the
Trustee for the benefit of the owners and beneficial owners of the Bonds the
full and prompt payment of (i) the principal of and redemption premium, if any,
on the Bonds when and as the same become due; (ii) the interest on the Bonds
when and as the same becomes due; (iii) the purchase price of Bonds tendered or
deemed tendered for purchase pursuant to the Indenture; and (iv) all loan
payments and purchase price payments due or to become due from the Company under
the Loan Agreement (collectively, the "Guaranteed Obligations"). The obligations
of each guarantor under the Guaranty will (subject to the release provisions
contained therein or the conversion of the Bonds to a variable interest rate
period) remain in full force and effect until the entire principal payment of,
redemption premium, if any, and interest on or purchase price of the Bonds have
been paid or provided for according to the terms of the Indenture and all other
Guaranteed Obligations have been paid and satisfied in full.
The Bonds were issued as tax-exempt bonds. If the Company or the Issuer do not
comply with certain of their respective covenants under the Indenture, the Loan
Agreement or the tax compliance agreement, as applicable, or if certain
representations or warranties made by the Company in the Loan Agreement or in
certain related certificates are false, then the interest on the Bonds may
become includable in gross income for federal income tax purposes retroactively
to the date of original issuance of the Bonds. If the Bonds are declared to be
taxable or the Loan Agreement is determined to be invalid, the Indenture
provides that the Bonds are subject to mandatory redemption within 60 days
thereafter at a redemption price equal to 100% of the principal amount thereof,
without premium, plus accrued interest to the date of redemption.
                                       2
--------------------------------------------------------------------------------

A copy of the Loan Agreement is filed as Exhibit 4.1 to this Current Report on
Form 8-K and is incorporated herein by reference as if fully set forth herein.
The description of the Loan Agreement set forth above is qualified in its
entirety by reference to the full text of the Loan Agreement filed herewith. A
copy of the Guaranty is filed as Exhibit 4.2 to this Current Report on Form 8-K
and is incorporated herein by reference as if fully set forth herein. The
description of the Guaranty set forth above is qualified in its entirety by
reference to the full text of the Guaranty filed herewith.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The discussion of the Loan Agreement and the Guaranty set forth under Item 1.01
of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01  Financial Statements and Exhibits.
(d) Exhibits.

  Exhibit No.          Exhibit Description

      4.1              Loan Agreement, dated as of September 1, 2020,

between New York State Environmental

                       Facilities Corporation and Casella Waste Systems, 

Inc.

      4.2              Guaranty Agreement, dated as of September 1, 2020,

by and between the guarantors

                       named therein and U.S. Bank National Association, as trustee

    101.SCH            Inline XBRL Taxonomy Extension Schema Document.**

    101.CAL            Inline XBRL Taxonomy Calculation Linkbase Document.**

    101.LAB            Inline XBRL Taxonomy Label Linkbase Document.**

    101.PRE            Inline XBRL Taxonomy Presentation Linkbase Document.**

    101.DEF            Inline XBRL Taxonomy Extension Definition Linkbase Document.**

      104              Cover Page Interactive Data File (formatted as

inline XBRL with applicable taxonomy

                       extension information contained in Exhibits 101).

       **              Submitted Electronically Herewith.

© Edgar Online, source Glimpses


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