S&P rates Interxion notes BB-

Standard & Poor's said it revised the outlook to negative from stable on Interxion Holding NV, after the company announced a €50 million increase to its €200 million senior secured notes due in 2017 and reported continued significant expansion capital spending in the third quarter of 2010.

The agency also said it affirmed its B+ long-term corporate credit rating, and assigned a BB- long-term issue rating to the proposed notes with a recovery rating of 2, indicating a 70% to 90% expected recovery in a default. The BB- issue rating on Interxion's existing 2017 notes were affirmed and the BB bank loan rating on Interxion's revolving credit facility due 2013.

The outlook revision reflects a view that Interxion's adjusted leverage is likely to increase above the thresholds for the rating, mainly adjusted debt-to-EBITDA rating of about 4x, S&P said.

The agency said it believes that Interxion's debt issue reflects the company's continued significant expansionary capital spending, which in turns results in negative overall cash generation.

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