Waste recycler Bach-Hauser Inc. plans to securitize its fees from municipal garbage contracts in order to finance an ambitious plan to install its waste reduction facilities throughout the U.S. and China.
Securitization is a financing strategy Bach-Hauser is leaning toward, said a spokesman for the company. The collateral would be based on fees the company would charge municipalities for receiving collected waste, such as tipping fees.
These run upwards of $135 per ton in urban areas such as Toronto, the spokesman said. But Buffalo, N.Y.-based Bach-Hauser intends to arrange for the trucking, collection, recycling, and composting of the waste in one, all-encompassing fee pegged to the waste management cost of each household or business involved. The spokesman said this ranges between $50 per user in rural areas to $250 per user in urban centers.
Though details for a garbage-inspired deal were sketchy, as the company was just launching the effort, it will not be the first. Residential Resources Inc. circled a Rule 144A transaction based on tipping fees for waste recycling company Thermo Tech Technologies several months ago.
Bach-Hauser just signed a 25-year licensing agreement with TCR Environmental Corp. for the worldwide rights to its proprietary Total Recycling System, which aims to reduce landfill usage by 100% for common recyclable products, and converts other waste into compost for sale to agricultural products users.
According to the company, the system could reduce landfill usage by up to 80% in the U.S. Because Bach-Hauser has the capacity to process up to 40,000 tons annually of the 500 million tons of solid waste produced per year in the U.S., it estimates a potential market exists for 12,500 facilities.