Moody’s affirms Datapipe on loan add-ons

Moody's Investors Service said it affirmed Datapipe, Inc.'s B3 corporate family rating and B3-PD probability of default rating, along with the B1 rating on its senior secured first-lien credit facilities and the Caa2 rating on its second-lien term loan.

The affirmation follows the company's announcement that it will raise an incremental $90 million of first-lien term loan debt, $25 million of second-lien term loan debt and $73 million of preferred equity.

Proceeds are expected to be used for general corporate purposes.

The outlook remains stable.

Moody’s said the B3 corporate family rating reflects Datapipe's small scale, high leverage and persistent negative free cash flow which is primarily the result of its high capital intensity and growth profile. These limiting factors are offset by Datapipe's stable base of contracted recurring revenues and established position within the high-growth, niche market segment of complex, auditable managed services and cloud offerings, the agency added.

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