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S&P rates QTS Realty debt B+
Standard & Poor’s said it assigned a B+ corporate credit rating to QTS Realty Trust Inc.
The agency also said it assigned B+ ratings and 3 recovery ratings to the company’s unsecured debt, which is issued by QualityTech LP, including the proposed $250 million unsecured notes due 2022 to be co-issued by QTS Finance Corp., along with the existing $400 million unsecured revolving credit facility due 2017 and existing $225 million term loan due 2018.
The 3 recovery rating on this debt indicates 50% to 70% expected default recovery.
The proceeds will be used to refinance existing indebtedness and pay transaction fees, S&P said.
The outlook is stable.
The ratings reflect the favorable growth prospects for data-center outsourcing by business and enterprise customers, the agency said, and the company’s low revenue churn and good predictability provided by long-term contracts.
Given the leasing stability provided by the company’s wholesale customer base, S&P said it considers the company’s business risk to be satisfactory, a category higher than the majority of rated retail-only data-center peers.
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