SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 30, 2005
Waste Management, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware
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1-12154
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73-1309529 |
(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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| 1001 Fannin, Suite 4000 Houston, Texas |
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77002 |
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(Zip Code)
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Registrant’s Telephone number, including area code: (713) 512-6200
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 1.01 Entry into Material Definitive Agreement
On November 30, 2005, Waste Management of Canada Corporation, a Canadian corporation and
subsidiary of Waste Management, Inc., entered into a three-year term loan agreement with BNP
Paribas Securities Corp. and Scotia Capital as Lead Arrangers and Book Runners and The Bank of Nova
Scotia as Administrative Agent. The agreement, which matures
November 30, 2008, allows Waste Management of Canada Corporation to
borrow up to CDN $410,000,000 (Canadian dollars) at any time on or before December 31, 2005; after
such date, any unused portion of the available credit will be immediately cancelled. Waste
Management, Inc. and Waste Management Holdings, Inc. have guaranteed all of Waste Management of
Canada Corporation’s obligations under the agreement. The agreement was entered into to facilitate
Waste Management, Inc.’s repatriation of accumulated earnings and capital from its Canadian
subsidiaries under the American Job Creations Act of 2004 pursuant to previously disclosed plans.
Under the Act, U.S. companies are allowed to repatriate earnings from their foreign subsidiaries at
a reduced tax rate during 2005.
Any borrowings under the agreement may be made by Waste Management of Canada Corporation as
either (i) a prime rate advance, which will bear interest at the greater of (a) the average annual
rates of interest offered by certain reference rate lenders and (b) the one-month Canadian Dollar
Offered Rate plus 0.5% per annum, or (ii) a banker’s acceptance advance, the face amount of which
will be discounted by certain discount rates offered by the lenders from time to time. The
agreement also provides for certain fees, including a banker’s acceptance fee and a standby fee
(applicable during the availability of the credit from closing until December 31, 2005), which
range from 0.275% to 0.850% and 0.085% and 0.2%, respectively, depending in each case on the
ratings by Moody’s and Standard & Poor’s of Waste
Management, Inc.’s senior unsecured long-term debt.
The agreement contains customary representations and warranties of each of Waste Management of
Canada Corporation as the borrower and Waste Management, Inc. and Waste Management Holdings, Inc.
as the guarantors. The agreement also requires Waste Management, Inc. to maintain the same minimum
interest coverage and maximum total debt to EBITDA ratios as are contained in its five-year
revolving credit facility. The agreement contains certain restrictions on the ability of Waste
Management of Canada Corporation and Waste Management Holdings, Inc. to incur additional
indebtedness as well as restrictions, no more restrictive than those contained in Waste Management,
Inc.’s five-year credit facility, on the ability of each of the companies party to the agreement
to, among other things, incur liens; make certain investments; engage in mergers and
consolidations; and make certain distributions or dividends.
The agreement contains customary events of default, including nonpayment of principal when
due; nonpayment of interest, fees or other amounts after stated grace period; inaccuracy of
representations and warranties; violations of covenants, subject in certain cases to negotiated
grace periods; certain bankruptcies and liquidations; any cross-default of more than $50 million;
certain judgments of more than $25 million; and Waste Management of Canada Corporation ceasing to
be a wholly-owned subsidiary of Waste Management, Inc. If an event of default occurs and is
continuing, Waste Management of Canada Corporation may be required to repay all amounts outstanding
under the agreement and cash-collateralize any outstanding banker’s
acceptances. Banks that hold more than 50% of the commitments under the agreement may elect to
accelerate the maturity of all amounts due upon the occurrence and during the continuation of an
event of default.
The banks that are party to the agreement have in the past performed, and may in the future
from time to time perform, investment banking, financial advisory, lending and/or commercial
banking services for Waste Management, Inc. and its subsidiaries, for which they have received, and
may in the future receive, customary compensation and reimbursement of expenses.