S&P Global Ratings has placed GFL Environmental on CreditWatch Positive after the company this week said it has entered into an agreement to sell its Environmental Services (ES) business and use a portion of the proceeds to repay debt.

GFL will maintain a 44% stake in the business and will receive $6.2 billion of net proceeds from the asset sale, expected to close in the first quarter. It plans to use up to $3.75 billion of the proceeds to repay debt, with the remainder being used for stock repurchases and general corporate purposes.

S&P said the proposed sale of the ES business is unlikely to have a meaningful impact on its view of GFL's competitive position.

The CreditWatch Positive placement reflects the likelihood that S&P will raise its ratings on GFL over the next few months by at least one notch following close of the proposed asset sale. This incorporates the expectation that GFL will use up to $3.75 billion of the sale proceeds to repay debt and maintain adjusted credit measures commensurate with a higher rating, S&P said.