SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 2, 2020
Casella Waste Systems, Inc.
(Exact Name of Registrant as Specified in Charter)
|Delaware|| ||000-23211|| ||03-0338873|
|(State or Other Jurisdiction|
| ||(IRS Employer|
|25 Greens Hill Lane,|
|(Address of principal executive offices)||(Zip Code)|
Registrant’s telephone number, including area code: (802) 775-0325
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading |
|Name of each exchange|
on which registered
|Class A common stock, $0.01 par value per share||CWST||The Nasdaq Stock Market LLC|
|(Nasdaq Global Select Market)|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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.
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.
|Exhibit No.||Exhibit Description|
Loan Agreement, dated as of September 1, 2020, between New York State Environmental Facilities Corporation and Casella Waste Systems, Inc.
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.|
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ||CASELLA WASTE SYSTEMS, INC.|
|Date: September 2, 2020|| ||By:|| ||/s/ Edmond R. Coletta|
| || ||Edmond R. Coletta|
| || ||Senior Vice President and Chief Financial Officer|