S&P revised the outlook for Cogent Communications to negative due to weak credit metrics.

S&P Global Ratings has revised the outlook for Cogent Communications Group LLC from stable to negative due to weak credit metrics. The rating agency expects Cogent's leverage ratio to remain above the threshold of 5.25x over the next year as the company optimizes its network while phasing out non-core customers and products.

Despite this change, S&P Global Ratings has affirmed the company's 'B+' credit rating and all debt ratings. The revised outlook reflects the risk of the leverage ratio staying above 5.25x due to high debt, which supports short-term discretionary cash flow (DCF) gaps as payments from T-Mobile decline. Cogent's leverage ratio is projected to increase to 5.5x by the end of 2024, up from 4.3x in 2023, as the company transitions former Sprint facilities into data center space and plans further product and customer phase-outs.