U.S. fiber-based bandwidth infrastructure services and colocation provider Zayo Group LLC is acquiring data center operator Latisys Corp. in a debt-financed transaction for $675 million, or roughly 15.3x last quarter annualized EBITDA as of Sept. 30, 2014. We are affirming our 'B' corporate credit rating on Zayo, and assigning our 'CCC+' issue-level rating and '6' recovery rating to Zayo's proposed $700 million of senior unsecured notes due 2023. At the same time, we are revising our recovery rating on the company's existing senior secured debt to '3' from '4'. The stable rating outlook reflects our expectation that leverage will remain elevated over the near term, but that liquidity should remain adequate given the company's healthy free operating cash flow (FOCF)
