S&P rates Softlayer, loan B

Standard & Poor's said it assigned its B corporate credit rating and stable outlook to Softlayer Technologies Inc.

At the same time, the agency said it assigned its B issue rating and 3 recovery rating to the company's $20 million revolving credit facility due 2015 and a B issue rating and 3 recovery rating to its $190 million term loan B and $20 million delayed draw term loan, both due in 2016.

Proceeds will be used, along with about $190 million of new private common equity, to fund GI Partners' purchase of a majority controlling interest in Softlayer, as well as repay $74.6 million of existing debt and for transaction costs, the agency said.

"Our ratings reflect the highly competitive, fragmented nature of the hosting and managed services sector, which is served in great part by companies with more market diversity and larger scale than Softlayer," said credit analyst Catherine Cosentino.

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