S&P rates Cequel Data loans B+, CCC+

Standard & Poor’s said it assigned a B corporate credit rating to Cequel Data Centers LP, which is rated on a consolidated basis with its operating subsidiary, TierPoint LLC.

The outlook is stable.

The agency also said it assigned a B+ rating and 2 recovery rating to TierPoint’s proposed $360 million senior secured first-lien credit facilities, which consists of a $40 million revolving credit facility due 2019 and a $320 million term loan due 2021.

The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the company’s proposed second-lien credit facility, consisting of a $100 million term loan due 2022.

The 6 recovery rating indicates 0 to 10% expected default recovery.

The proceeds, along with an equity contribution from investors, will be used to fund the acquisition of Xand Holdings and to repay existing debt, S&P said.

The ratings reflect the company’s high pro forma adjusted leverage of about 7.1x for 2014, which is expected to decline to the low-6x range in 2015 on double-digit revenue growth, the agency said.

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