Summary of Advantages of Sale of SPSAs WTE
- Slides: 12
Summary of Advantages of Sale of SPSA’s WTE Facilities Presented to SPSA Member Communities February 2010
Benefits of Selling WTE Facilities • Reduce SPSA debt by approx. $142 million • Reduce debt service: average 60+% less • Reduce capital expenditures – Cell VII expansion: $30 million – Two new transfer stations: $22 million • Reduce operational expenses • Extend landfill life through diversion of non- processables • Reduce operational risks and complexity – more certainty 2
SPSA Financial Viability • SPSA system remains unchanged – WTE Facilities owned by Wheelabrator but remains part of SPSA system through the service agreements (i. e. commitment of municipal waste to Wheelabrator) – Suffolk Landfill (SPSA) – Transfer Stations (SPSA) – Other services (SPSA) • Use and Support Agreements valid • Funding of system remains same 3 through the tipping fees
Key VRA Requirements • Member community guarantee of outstanding reduced VRA debt (~$50 M) (See slide 6 and 7 for lenders’ positions) • Debt retirement plan – Proportional debt reduction among lenders – Levelized remaining debt service • Inter-creditor agreements among 4 SPSA lenders
Debt Retirement Plan • Options Considered – Pro rata reduction of all debt (Ambac, Wachovia, VRA, and Virginia Beach) – levelize remaining debt service. – Retire all but VRA 2009 bonds and City of Virginia Beach debt (Considered a “non-starter with the VRA and CAO’s), backloads debt service (sinking fund considered) – Pro rata reduction of all but Wachovia debt, which allows for full payback of Virginia Beach loan (note: approach is acceptable to Wachovia) 5
Allocation of Guarantees Source: Mesirow Financial 6
Pro-Rata Scenario with VA Beach Takeout 7 Source: Mesirow Financial
Project Savings Note: FY 2018 is a partial year. Use and support agreements expire January 24, 2018 8
Note: FY 2018 is a partial year. Use and support agreements expire January 24, 2018 9
Note: FY 2018 is a partial year. Use and support agreements expire January 24, 2018 10
Source: SPSA Pro Forma, January 26, 2009, Pro Rate Debt Reduction, some variation may occur based on final debt retirement plan results Bottom Line: Member communities will spend less for solid waste disposal through 2018 if the WTE Facilities are sold. 11
Status • Responses to VRA Resolutions submitted • • • 12 on Jan. 29 Volume cap requested from Governor Requesting member community guarantees in February Inter-creditor agreements being finalized Met with VRA Feb. 8 -9 Final VRA approval Mar. 2010 Other consents being perfected for a closing before May 1, 2010
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- Slide 14/21
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- Point of sale reconciliation