S&P raises CyrusOne, facility, notes

S&P said it raised its corporate credit rating on CyrusOne Inc. to BB from BB- and raised its issue-level rating on the company's senior unsecured credit facility and senior unsecured notes to BB+ from BB.

The recovery rating remains 2, indicating an expectation for substantial (70%-90%; rounded estimate: 85%) recovery for lenders in the event of a payment default.

The outlook is stable.

The agency said the upgrade reflects its view that the company will continue to use a healthy amount of equity to fund expansion plans, such that it will operate within its 4x-5x leverage target.

The stable outlook reflects S&P’s expectation that the company will have adequate liquidity to fund growth initiatives that yield negative discretionary cash flow over the next few years, as it continues to invest in additional data center capacity.

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