S&P rates Rackspace notes B+

S&P said it assigned its B+ issue-level rating and 2 recovery rating to Rackspace Technology Global Inc.’s planned $550 million of senior secured notes due 2028. The 2 recovery rating indicates expectations for substantial (70%-90%; rounded estimate: 80%) recovery in default.

Rackspace’s other senior secured debt is rated B+ by S&P.

Rackspace plans to use the proceeds and the recent $2.3 billion term loan to fully repay its outstanding $2.8 billion senior secured term loan due November 2023.

“We view this as a leverage-neutral transaction; thus, it does not have a material effect on our base-case forecast for the company,” S&P said in a press release.

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