S&P downgrades Internap

S&P said it lowered all of the ratings on Internap Corp. by one notch, including its issuer credit rating to B- from B to reflect the company's weak credit ratios and a revised assessment of the business given the volatility of its earnings and the prospect for elevated leverage due to continued acquisitions.

Internap's adjusted leverage of 6.7x for the last 12 months is elevated for the rating following weaker-than-expected operating performance in the first quarter of 2019, the agency said.

The downgrades reflect Internap's lower-than-expected earnings stemming primarily from lower non-recurring revenue and lower number of installs net of churn, which have raised its adjusted leverage to 6.7x from about 6.3x as of fiscal year-end 2018, S&P said.

The stable outlook reflects a view that Internap has the ability to reduce its leverage through modest earnings growth, the agency said.

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