Ascent Capital Group and Monitronics International Announce the Execution of Support Agreement With Certain Bondholders for N...
September 25 2018 - 7:30AM
Ascent Capital Group, Inc. (“Ascent”) (NASDAQ: ASCMA) and its
wholly owned subsidiary, Monitronics International, Inc. (“MONI”),
today announced the execution of a transaction support agreement
(the “Support Agreement”) with holders of approximately $386
million aggregate principal amount of MONI’s 9.125% Senior Notes
due 2020 (the “Old MONI Notes”), representing approximately 66% of
the outstanding Old MONI Notes, who have committed to participate
(the “Consenting Bondholders”) in the proposed new exchange and
related transactions described below (the “New Proposed Exchange
Transactions”). As a result of the execution of the Support
Agreement, Ascent and MONI have terminated the offer previously
announced on August 30, 2018 to exchange cash and/or a combination
of new 7.750%/3.750% Senior Unsecured Cashpay/PIK Notes due 2023 of
MONI and warrants to purchase Series A common stock of Ascent for
Old MONI Notes and the solicitation of consents by MONI to certain
proposed amendments to the indenture governing the Old MONI Notes
(the “Existing MONI Exchange Offer and Consent Solicitation”). In
addition, Ascent has terminated the offer previously announced on
August 30, 2018 to purchase for cash (the “Existing Ascent Tender
Offer” and, together with the Existing MONI Exchange Offer and
Consent Solicitation, the “Terminated Offers”) 4.00% Convertible
Senior Notes due 2020 of Ascent (the “Ascent Convertible Notes”).
Under the New Proposed Exchange Transactions,
MONI would make an offer to eligible holders to exchange Old MONI
Notes for new second lien notes that would be issued by MONI (“MONI
Second Lien Notes”) and solicit the consent of such holders to
certain amendments to the indenture governing the Old MONI Notes
that would eliminate or waive substantially all restrictive
covenants and events of default. Pursuant to the Support Agreement,
the Consenting Bondholders have agreed to support and fully
participate in such offer. In addition, under the New Proposed
Exchange Transactions, MONI would seek to amend its senior secured
credit facility (the “Credit Facility”) to permit, among other
things, the issuance by MONI of MONI Second Lien Notes and MONI
Third Lien Notes (as defined below) and provide certain covenant
relief for the operating business. MONI would also pay down $100
million principal amount of the term loans outstanding thereunder
with cash funded by Ascent, and the revolving loan commitments
under the Credit Facility would be permanently reduced by 10%.
Consenting Bondholders and their affiliates own approximately 16%
of the principal amount of the outstanding term loans under the
Credit Facility. Further, an offer would be made to eligible
holders to exchange Ascent Convertible Notes for new third lien
notes that would be issued by MONI (“MONI Third Lien Notes”).
The New Proposed Exchange Transactions are not conditioned upon the
making or consummating of such offer to eligible holders of Ascent
Convertible Notes. In the alternative, under the New Proposed
Exchange Transactions, if the amendments to the Credit Facility are
not completed within the time frame prescribed by the Support
Agreement, an alternate offer that does not require any amendments
to the Credit Facility to consummate would instead be made to
eligible holders of the Old MONI Notes. Pursuant to the Support
Agreement, the Consenting Bondholders have also agreed to support
and fully participate in the alternate offer to eligible holders of
the Old MONI Notes. This alternate offer would be largely similar
to the Existing MONI Exchange Offer and Consent Solicitation that
has been terminated, including (among other things) the use of $100
million of cash by Ascent in connection with the acquisition of Old
MONI Notes, but the alternate offer will include certain changes
required by the Support Agreement. The New Proposed Exchange
Transactions will be subject to certain terms and conditions,
including those more particularly described in the Support
Agreement (and the term sheet annexed thereto, the “Term
Sheet”). When available, confidential offering memoranda
relating to the New Proposed Exchange Transactions and setting
forth these terms and conditions will be distributed to eligible
holders. For additional information regarding the New
Proposed Exchange Transactions, please see Ascent’s Current Report
on Form 8-K filed with the Securities and Exchange Commission
concurrently herewith, which includes as an exhibit thereto the
Support Agreement together with the Term Sheet. Ascent and
MONI intend, and expect, to complete the New Proposed Exchange
Transactions in a timely manner.
Each of the Terminated Offers was set to expire
at 11:59 p.m., New York City time, on October 3, 2018. As a
result of the termination of the Existing Ascent Tender Offer, no
Ascent Convertible Notes will be accepted for purchase and no
consideration will be paid or become payable to holders of Ascent
Convertible Notes who have tendered their Ascent Convertible Notes
in the Existing Ascent Tender Offer. All Ascent Convertible Notes
previously tendered and not withdrawn will be promptly returned or
credited back to their respective holders. As a result of the
termination of the Existing MONI Exchange Offer and Consent
Solicitation, no Old MONI Notes will be accepted for exchange and
no consideration will be paid or become payable to holders of Old
MONI Notes who have tendered their Old MONI Notes in the Existing
MONI Exchange Offer and Consent Solicitation. All Old MONI Notes
previously tendered and not withdrawn will be promptly returned or
credited back to their respective holders. This press release
confirms the formal termination of each of the Existing Ascent
Tender Offer and the Existing MONI Exchange Offer and Consent
Solicitation referenced above.
D.F. King & Co., Inc. acted as the Tender
Agent and Information Agent for the Existing Ascent Tender Offer
and the Exchange Agent and Information Agent for the Existing MONI
Exchange Offer and Consent Solicitation. Holders of Ascent
Convertible Notes with questions regarding the termination of the
Existing Ascent Tender Offer and holders of Old MONI Notes with
questions regarding the termination of the Existing MONI Exchange
Offer and Consent Solicitation may direct such questions to D.F.
King & Co., Inc., at (212) 269-5550 (for brokers and banks) or,
with respect to the Ascent Convertible Notes, (800) 820-2416 or by
e-mail to ascent@dfking.com and, with respect to the Old MONI
Notes, (877) 674-6273 or by e-mail to monitronics@dfking.com.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy the Ascent
Convertible Notes, the Old MONI Notes, the MONI Second Lien Notes
or the MONI Third Lien Notes or any other securities, nor shall
there be any offer, solicitation or sale of the Ascent Convertible
Notes, the Old MONI Notes, the MONI Second Lien Notes or the MONI
Third Lien Notes or any other securities in any state or other
jurisdiction in which such an offer, solicitation or sale would be
unlawful.
Forward Looking Statements
This press release includes certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
about the Terminated Offers, the New Proposed Exchange Transactions
and other matters that are not historical facts. Words such as
“believes,” “estimates,” “anticipates,” “intends,” “expects,”
“projects,” “plans,” “seeks,” “may,” “will,” “would,” “should” and
similar expressions or, in each case, their negative or other
variations or comparable terminology may identify forward-looking
statements. These forward-looking statements involve many risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements, including
general market and economic conditions, changes in law and
government regulations and other matters affecting the business of
Ascent and MONI. These forward-looking statements speak only as of
the date of this press release, and Ascent and MONI expressly
disclaim any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statement contained herein to
reflect any change in Ascent’s or MONI’s expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based. Please refer to the publicly
filed documents of Ascent and MONI, including the most recent Forms
10-K and 10-Q for additional information about Ascent and MONI and
about the risks and uncertainties related to Ascent’s business and
MONI’s business which may affect the statements made in this press
release.
About Ascent and Brinks Home
Security
Ascent Capital Group, Inc. (NASDAQ: ASCMA) is a
holding company whose primary subsidiary, Monitronics, operates as
Brinks Home Security™, one of the largest home security and alarm
monitoring companies in the U.S. Headquartered in the Dallas
Fort-Worth area, Brinks Home Security secures approximately 1
million residential and commercial customers through highly
responsive, simple security solutions backed by expertly trained
professionals. Brinks Home Security has the nation’s largest
network of independent authorized dealers - providing products and
support to customers in the U.S., Canada and Puerto Rico - as well
as direct-to-consumer sales of DIY and professionally installed
products.
Contact:Erica Bartsch Sloane
& Company212-446-1875ebartsch@sloanepr.com
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