S&P gives B- to DataBank, facilities

S&P said it assigned its B- corporate credit rating to DataBank and assigned a B- issue-level rating to the company's proposed senior secured first-lien credit facilities, which consist of a $50 million revolving credit facility maturing in 2022 and a $230 million first-lien term loan maturing in 2024.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery for lenders in the event of a payment default.

The company's proposed $100 million senior secured second-lien term loan is unrated.

The outlook is stable.

“The rating on DataBank primarily reflects its relatively small scale in the fragmented and competitive data center industry, meaningful geographic concentration, exposure to economically sensitive small and midsize business customers, and our expectation that leverage will be elevated in the mid-7x area in 2017 with negative free operating cash flow,” S&P said in a news release.

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