Moody’s rates Peak 10 facilities B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Peak 10 Holding Corp., a parent holding company of Peak 10, Inc. that will acquire ViaWest, Inc.

The agency also assigned a B2 (LGD3) rating to the company's proposed $1.27 billion senior secured first-lien credit facility, which consists of a $1.12 billion seven-year term loan and a $150 million five-year revolver.

Additionally, Moody's assigned a Caa2 (LGD 5) rating to the proposed $390 million second-lien eight-year term loan.

Proceeds from the secured credit facilities and new equity will be used to refinance existing Peak 10, Inc. and ViaWest debt and to fund a portion of the acquisition of ViaWest by funds advised by GI Partners.

The outlook is stable.

Upon completion of the transaction, Moody's will withdraw the ratings of Peak 10, Inc. and ViaWest Inc.

Moody’s said the B3 corporate family rating reflects Peak 10's relatively small scale, very high leverage and high capital intensity associated with growing the business.

These limiting factors are offset by the company’s stable base of contracted recurring revenues, its position as a high-quality colocation provider in the high-growth sector and its improved national sales capabilities following the merger with ViaWest.

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