Moody's lifts Clean Harbors view to positive

Moody's Investors Service said it changed the outlook to positive from stable for Clean Harbors, Inc. and affirmed existing ratings.

The change in the outlook to positive acknowledges improvement in the company's credit statistics since Moody's prior press release in June 2004, notably the enhanced profitability as measured by EBIT margin and return on assets, the agency noted.

The positive outlook reflects the expectation of further organic improvement in Clean Harbors' financial profile, which is likely to be driven by ongoing improvements in asset utilization through price and bolstered management, focused rebuilding of its fleet, continued operating cost reductions as well as increased penetration of existing customer relationships, Moody's added.

Affirmed ratings include the B1 $30 million revolver due 2009, B2 $90 million secured letters of credit facility due 2009, $150 million 11.25% guaranteed second-lien senior notes due 2012 at B3 and the B2 corporate family rating.

Moody's said the ratings could be upgraded should Clean Harbors improve the ratio of free cash flow to adjusted debt sustainably to the high single digits or better, coupled with continued measurable gains in EBIT margin and return on assets exceeding 9% and 10%, respectively.

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