Moody's cuts Iron Mountain loan, rates notes Ba1

Moody's Investors Service said it assigned a Ba1 rating to $750 million of proposed senior unsecured notes offered by Iron Mountain Inc. and its subsidiary, Iron Mountain Canada Operations ULC.

Concurrently, the rating on the upsized $1.5 billion senior revolver was lowered to Ba1, the same level as the new notes.

The speculative grade liquidity assessment was raised to SGL-2 from SGL-3.

All other ratings were affirmed, including Iron Mountain's Ba3 corporate family rating and the B1 rating on the senior subordinated notes. The outlook remains negative.

Moody's said the Ba3 rating continues to reflect Iron Mountain's large, recurring revenue base and considerable market share in North America which drives high profitability margins. However, the document storage business faces secular pressures stemming from the gradual shift away from paper toward electronic media.

In mature markets in particular, the agency said it believes it may become increasingly difficult for Iron Mountain to offset volume weakness with price increases. Demand is growing organically in emerging markets as companies increasingly outsource their storage needs to third parties.

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