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Moody's trims WIN Waste
Moody's Ratings said it downgraded the ratings of WIN Waste Innovations Holdings Inc., including the corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD and the rating on the company's first-lien senior secured bank debt to Caa1 from B3. The agency also changed the outlook to stable from negative.
“The downgrades reflect WIN's weak liquidity with sustained negative free cash flow and no revolver availability. Moody's does not expect the company to generate free cash flow in 2024 despite moderating capital expenditures (capex) and earnings improvement. This limits the company's ability to absorb any unexpected operational challenges absent additional capital support. WIN has already received about $66 million in additional equity from its sponsor (Macquarie) during 2024.
“In addition, the company's leverage remains high driven by incremental borrowings to support capital spending needs, including remediation of prior waste-to-energy (WtE) plant disruptions that negatively impacted operating results, and acquisitions. Moody's expects debt/EBITDA (including Moody's standard adjustments) to remain high but fall toward 6x through 2024 from EBITDA growth,” the agency said in a press release.
The improved outlook reflects an “expectation for WIN to build on its positive momentum over the past year, with normalized WtE plant operations, higher pricing and cost discipline helping to offset weaker industrial volumes amid macroeconomic headwinds. Moody's expects these factors to support an improvement in credit metrics, including adjusted EBITDA margin improving toward 23% over the next year,” the agency said.
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