Moody's rates Terremark notes Caa1

Moody's Investors Service said it assigned a Caa1 (LGD 5, 82%) rating to Terremark Worldwide, Inc.'s $75 million second-lien secured note issuance. The agency also said it revised the rating on its $470 million senior secured notes due 2017 to B1 (LGD 3, 36%) from B1 (LGD 3, 42%).

Moody's also said it affirmed its corporate family and probability of default ratings at B2 and speculative grade liquidity rating of SGL-2.

The outlook is stable.

The proceeds will be used for general corporate purposes, which will include the funding of the company's data center expansion, Moody's said.

The SGL-2 liquidity rating indicates good liquidity, as the new note issuance will bolster the company's cash balances to fund the company's expansion plans, the agency said.

The ratings also consider the significant continuing execution risk from the company's ongoing expansion, increasingly competitive environment as the company grows its managed service business, high leverage and the high capital intensity inherent in the company's business plans, Moody's said.

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