Moody's rates Iron Mountain loan Baa3

Moody's Investors Service said it changed Iron Mountain Inc.'s outlook to negative from stable and lowered its liquidity rating to SGL-2 from SGL-1. Concurrently, a Baa3 (LGD2, 11%) rating was assigned to a proposed $1.35 billion senior secured credit facility. All other ratings were affirmed, including the Ba3 corporate family rating and the B1 (LGD4, to 66% from 67%) rating on the senior subordinated note issues.

Iron Mountain is seeking to refinance its existing $765 million senior secured revolver due April 2012 and $400 million senior secured term loan due 2014 with a $750 million senior secured revolver and a $600 million senior secured term loan A due 2016.

The change in Iron Mountain's outlook to negative from stable reflects the expectation that financial leverage will rise about one-half a turn to 4.5 times over the next 18 months due to a considerable shift in the company's financial policies towards higher shareholder payouts, partially funded with debt, the agency said.

The negative outlook further reflects the possibility that margin enhancement initiatives in the international business could take longer to achieve than planned or not be fully realized, causing financial leverage to be sustained at an even higher level over the medium term, the agency added.

The ratings consider Iron Mountain's large revenue base, high operating margins, good liquidity profile, considerable market share in North America and the diversification of revenues geographically and by customer as well as secular pressures stemming from the gradual shift away from paper towards electronic media, Moody's added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.