Casella, a regional solid waste, recycling and resource management services company is proceeding with its previously announced debt refinancing.

Bank of America Merrill Lynch advised the company that certain commitments are in place to fund a new term loan B facility in the amount of $350 million priced at 99.50% of the principal amount and a revolving line of credit facility in the amount of $160 million.

Upon closing, the term loan B facility is expected to have a seven-year term and will bear interest at a rate of LIBOR+3% (with a 1% LIBOR floor), which will be reduced to a rate of LIBOR+2.75% upon the company reaching a consolidated net leverage ratio of 3.75x or less.

The revolving credit facility is expected to have a five-year term and will initially bear interest at a rate of LIBOR+3% per annum, which will be adjusted from an applicable rate of 2.50% to 3.25% depending on the company’s consolidated net leverage ratio.

The credit facility is expected to close on October 17, 2016, subject to the negotiation, execution and delivery of definitive loan documentation and customary closing conditions. The company intends to use the proceeds of the credit facility to redeem all of its outstanding 7.75% senior subordinated notes due 2019, the repayment in full of the its existing senior secured asset-based revolving credit and letter of credit facility, which matures on February 2020 (or November 2018 if the senior subordinated notes are not refinanced by then), transaction related fees and expenses, working capital and other purposes.

The company expects the total cost of this transaction, including the call premium on the senior subordinated notes to be redeemed and the discount on the new term loan B facility, will be approximately $15 million. Total annual interest savings is expected to be approximately $11 million.

Rutland, VT-based Casella Waste Systems provides solid waste management services consisting of collection, transfer, disposal and recycling services in the northeastern U.S.