VAUGHAN, ON - GFL Environmental Inc. (NYSE: NYSE:GFL) (TSX: GFL) has disclosed its intentions to participate in a bond offering, subject to market conditions and other factors. The company aims to raise $210 million through the sale of Solid Waste Disposal Revenue Bonds issued by the Florida Development Finance Corporation.
The proceeds from the offering will be loaned to a GFL subsidiary to fund solid waste disposal facilities in Florida. This move is part of GFL's strategy to shift its debt structure from secured to unsecured, in line with investment grade practices, and to extend debt maturities while maintaining balance sheet flexibility. The bond offering comes ahead of the 2025 due date for GFL's 3.750% Senior Secured Notes.
The bonds in question will not be registered under the Securities Act of 1933 and will only be available to qualified institutional buyers as per Rule 144A. This approach ensures compliance with securities law, as the bonds cannot be offered or sold without registration or an exemption.
GFL, with headquarters in Vaughan, Ontario, ranks as North America's fourth-largest diversified environmental services company. It offers solid waste management, liquid waste management, and soil remediation services across Canada and in over half of the U.S. states, employing over 20,000 people.
The company's announcement includes forward-looking statements regarding the potential bond offering and the application of the proceeds. These statements are not guarantees of future performance but reflect GFL's current expectations. Investors are cautioned that actual outcomes may differ due to various risk factors outlined in GFL's regulatory filings.
This bond offering plan is based on a press release statement from GFL Environmental Inc. and is intended to provide investors with key information regarding the company's financial activities.
"In other recent news, GFL Environmental Inc. reported an 11.1% year-over-year revenue growth for the second quarter of 2024, reaching $2.06 billion. The company's adjusted EBITDA margin also improved to 28.7%. In the same period, GFL Environmental announced the conversion of its Series A perpetual convertible preferred shares into subordinate voting shares, a move managed by HPS Investment Partners, LLC. This transaction may impact the distribution of voting power and ownership among shareholders.
Jefferies, a prominent financial services firm, maintained a Buy rating on GFL Environmental and increased the price target to $54.00. The firm cited the company's strong business momentum and successful execution of growth initiatives. GFL Environmental also raised its full-year guidance for adjusted EBITDA to between $2.24 billion and $2.25 billion and plans to invest between $250 million and $300 million into recycling and RNG infrastructure in 2024. These are among the recent developments for GFL Environmental."
InvestingPro Insights
GFL Environmental Inc.'s latest financial maneuver to issue Solid Waste Disposal Revenue Bonds aligns with a broader corporate strategy that has seen the company consistently raise its dividend for four consecutive years, a testament to its commitment to shareholder returns. This commitment is reflected in an InvestingPro Tip highlighting the company's dividend growth, with a notable increase of 7.69% in the last twelve months as of Q2 2024.
Investors looking at GFL's financial health will note that the company has not been profitable over the last twelve months, as indicated by an adjusted P/E ratio of -76.18. However, analysts are optimistic, predicting profitability for the current year, which may reassure stakeholders considering the bond offering's potential future returns.
In terms of valuation, GFL is trading at a high revenue valuation multiple, with a market capitalization of $15.55 billion and a price-to-book ratio of 3.12 as of Q2 2024. While this may suggest a premium on its stock price, the company's revenue growth remains steady at 3.23% for the last twelve months as of Q2 2024.
For investors seeking a deeper dive into GFL's financials and performance, there are additional InvestingPro Tips available, including insights into earnings revisions and stock volatility. As of now, 8 analysts have revised their earnings downwards for the upcoming period, which may be a point of consideration for potential bond investors.
Discover more insights and detailed analysis with additional InvestingPro Tips for GFL at https://www.investing.com/pro/GFL.
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