Covanta Holding Corporation to Offer $300 Million of Cash Convertible Senior Notes

Covanta Holding Corporation to Offer $300 Million of Cash Convertible Senior
Notes

FAIRFIELD, N.J., May 18 /PRNewswire-FirstCall/ -- Covanta Holding Corporation
(NYSE: CVA) ("Covanta") today announced that it intends to privately offer,
subject to market and other conditions, $300 million aggregate principal
amount of cash convertible senior notes due 2014. Covanta also expects to
grant the initial purchasers for the offering an option to purchase up to an
additional $45 million aggregate principal amount of notes, solely to cover
over-allotments, if any. The notes will be offered only to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act").

Interest will be payable semi-annually on June 1 and December 1, and the notes
will mature on June 1, 2014. Prior to March 1, 2014, the notes will be
convertible into cash only upon specified events and, thereafter, at any time.
Upon cash conversion, Covanta will deliver an amount of cash calculated over
the applicable conversion period. Covanta will not deliver common stock (or
any other securities) upon conversion under any circumstances (subject to
limited exception). The interest rate, conversion price and other terms will
be determined by negotiations between Covanta and the initial purchasers.

In connection with the pricing of the notes, Covanta intends to enter into
privately negotiated cash convertible note hedge transactions with affiliates
of one or more of the initial purchasers (the "option counterparties") that
are expected to reduce Covanta's exposure to potential cash payments in excess
of the principal amount of the notes that may be required to be made by
Covanta upon the cash conversion of the notes. Covanta also intends to enter
into privately negotiated warrant transactions with the option counterparties,
which could have a dilutive effect to the extent that the price of Covanta's
common stock exceeds the applicable strike price of the warrants. If the
initial purchasers exercise their over-allotment option, the notional size of
the cash convertible note hedge transactions and the warrant transactions will
be automatically increased in a manner proportionate to the increase in the
principal amount of notes being sold in the offering.

In connection with establishing their initial hedges of the cash convertible
note hedge transactions and the warrant transactions, the option
counterparties (and/or their respective affiliates) expect to enter into
various over-the-counter cash-settled derivative transactions with respect to
Covanta's common stock, and/or purchase shares of Covanta's common stock in
privately negotiated transactions and/or open market transactions concurrently
with, or shortly following, the pricing of the notes, and may unwind these
over-the-counter cash-settled derivative transactions with respect to
Covanta's common stock and purchase shares of Covanta's common stock in open
market transactions shortly following the pricing of the notes. These
activities could have the effect of increasing or preventing a decline in the
price of Covanta's common stock concurrently with or shortly following the
pricing of the notes. The option counterparties (and/or their respective
affiliates) may modify their hedge positions following the pricing of the
notes from time to time (and are likely to do so during any conversion period
related to the cash conversion of the notes) by entering into or unwinding
various over-the-counter derivative transactions with respect to shares of
Covanta's common stock, and/or by purchasing or selling shares of Covanta's
common stock or the notes in privately negotiated transactions and/or open
market transactions. These activities could adversely affect the value of
Covanta's common stock.

Covanta intends to use the net proceeds from the offering, together with the
proceeds from the warrant transactions, for working capital and general
corporate purposes, which may include funding a portion of the construction
cost of a 1,700 metric tpd energy-from-waste facility in Dublin, Ireland,
other capital expenditures, potential permitted investments or acquisitions.
Concurrently with the offering, Covanta intends to use available cash to pay
the cost of the cash convertible note hedge transactions described above.

This press release does not constitute an offer to sell, or the solicitation
of an offer to buy, any securities. The notes have not been, and will not be,
registered under the Securities Act or the securities laws of any other
jurisdiction and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements. The
notes are being offered only to qualified institutional buyers pursuant to
Rule 144A under the Securities Act.

About Covanta
Covanta Holding Corporation (NYSE: CVA), is an internationally recognized
owner and operator of large-scale Energy-from-Waste and renewable energy
projects and a recipient of the Energy Innovator Award from the U.S.
Department of Energy's Office of Energy Efficiency and Renewable Energy.
Covanta's 38 Energy-from-Waste facilities provide communities with an
environmentally sound solution to their solid waste disposal needs by using
that municipal solid waste to generate clean, renewable energy. Annually,
Covanta's modern Energy-from-Waste facilities safely and securely convert
approximately 17 million tons of waste into more than 8 million megawatt hours
of clean renewable electricity and create 10 billion pounds of steam that are
sold to a variety of industries. For more information, visit
www.covantaholding.com.

Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking"
statements as defined in Section 27A of the Securities Act of 1933 (the
"Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the
"PSLRA") or in releases made by the Securities and Exchange Commission
("SEC"), all as may be amended from time to time. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or achievements of
Covanta and its subsidiaries, or general industry or broader economic
performance in domestic and international markets in which Covanta operates or
competes, to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Statements that are not historical fact are forward-looking statements.
Forward-looking statements can be identified by, among other things, the use
of forward-looking language, such as the words "plan," "believe," "expect,"
"anticipate," "intend," "estimate," "project," "may," "will," "would,"
"could," "should," "seeks," or "scheduled to," or other similar words, or the
negative of these terms or other variations of these terms or comparable
language, or by discussion of strategy or intentions. These cautionary
statements are being made pursuant to the Securities Act, the Exchange Act and
the PSLRA with the intention of obtaining the benefits of the "safe harbor"
provisions of such laws. Covanta cautions investors that any forward-looking
statements made by Covanta are not guarantees or indicative of future
performance. Important assumptions and other important factors that could
cause actual results to differ materially from those forward-looking
statements with respect to Covanta, include, but are not limited to, those
factors, risks and uncertainties that are described in periodic securities
filings by Covanta with the SEC. Although Covanta believes that its plans,
intentions and expectations reflected in or suggested by such forward-looking
statements are reasonable, actual results could differ materially from a
projection or assumption in any forward-looking statements. Covanta's future
financial condition and results of operations, as well as any forward-looking
statements, are subject to change and inherent risks and uncertainties. The
forward-looking statements contained in this press release are made only as of
the date hereof and Covanta does not have or undertake any obligation to
update or revise any forward-looking statements whether as a result of new
information, subsequent events or otherwise, unless otherwise required by law.

SOURCE Covanta Holding Corporation

Marisa F. Jacobs, Esq., Vice President, Investor Relations and Corporate
Communications, +1-973-882-4196, or Vera Carley, Director, Media Relations and
Corporate Communications, +1-973-882-2439, both of Covanta Holding
Corporation