Moody's upgraded CyrusOne Inc. unit CyrusOne LP's senior unsecured and corporate family ratings to Ba1 from Ba2 and revised the ratings outlook to stable from positive.
The rating agency said the upgrade factors in a notable increase in the data center real estate investment trust's scale of operations, improvement in earnings quality, moderate leverage ratios and continued demand for data center assets.
Moody's also noted that the REIT's credit profile benefits from solid and sustained demand for data center space, its growing track record as a reliable data center landlord, its predictable earnings stream and its leverage-neutral funding strategy.
The new outlook is based on the rating agency's expectation that the REIT's leverage and coverage ratios would stay at about the current levels. The outlook also incorporates the expectation that portfolio growth rate would moderate due to the larger asset base and increased competition, and that CyrusOne will continue to consolidate its position in the data center segment.
