Moody’s rates Cologix B3, facilities B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Stonepeak Claremont Merger Sub, Inc. (Cologix Holdings, Inc.).

The agency also assigned a B2 (LGD3) rating to the company's proposed $435 million senior secured first-lien credit facility which consists of a $300 million seven-year term loan, a $60 million 4.75-year delayed-draw term loan and a $75 million five-year revolver.

Additionally, Moody's assigned a Caa2 (LGD 5) rating to the proposed $135 million second-lien eight-year term loan.

Proceeds will be used to refinance existing debt and to fund a portion of the acquisition of Cologix by Stonepeak Infrastructure Partners.

Moody’s said the B3 corporate family rating reflects Cologix’s small scale, high leverage and weak free cash flow primarily resulting from its high capital intensity and growth profile.

These limiting factors are positively offset by the company’s stable base of contracted recurring revenues, its high margins, and established position within the high-growth, niche market segments of interconnection and colocation services, the agency added.

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