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S&P feels better about Clean Harbors' expansion

The Associated Press

Standard & Poor's is feeling better about Clean Harbors' decision to purchase a competitor.

On Tuesday, S&P Ratings Services reaffirmed its rating of Clean Harbors' credit and said it no longer expects to downgrade the rating soon.

Clean Harbors Inc., based in Norwell, Mass., is an environmental cleanup company that specializes in services like removing hazardous waste material. Late last month, it said it would buy Safety-Kleen Inc., another environmental cleanup company that refines and recycles used oil, for $1.25 billion in cash. The company said it would finance the deal, in part, by selling $550 million in debt.

Shortly after the announcement, S&P placed Clean Harbors' credit rating on a negative watch, meaning it thought it was likely to downgrade the rating.

But in a note Tuesday, S&P said it had reassessed Clean Harbors' risk profile and believed it would be able to successfully integrate Safety-Kleen and to turn in consistent results "despite the prospects for slow economic growth."

S&P kept its rating of the company's credit at "BB+," which is the highest level in non-investment grade, or "junk" bonds. Junk bonds are riskier than investment grade bonds.

Clean Harbors' stock closed down 20 cents to $56.99, on a down day for the markets. The stock has changed hands between $46.94 and $71.63 in the past 52 weeks, and is down about 11 percent since the start of the year.