Ascent Capital Group, Inc. (“Ascent”) (NASDAQ: ASCMA) today
announced that its wholly owned subsidiary, Monitronics
International, Inc. (“Monitronics”), launched a new offer to
exchange (the “Exchange Offer”) Monitronics’ 5.500%/6.500% Senior
Secured Second Lien Cashpay/PIK Notes due 2023 (the “New Notes”)
for validly tendered (and not validly withdrawn) Monitronics’
9.125% Senior Notes due 2020 (the “Old Notes”) and, in conjunction
with the Exchange Offer, a solicitation (the “Consent
Solicitation”) of consents (the “Consents”) by Monitronics to
certain proposed amendments (the “Proposed Amendments”) to the
indenture governing the Old Notes (the “Old Notes Indenture”).
The Exchange Offer and the Consent Solicitation
are being made concurrently with, and on the same terms as, the
existing exchange offer (the “Concurrent Exchange Offer”) and
consent solicitation (the “Concurrent Consent Solicitation”)
announced by Monitronics on November 5, 2018 and are available to
any holders that are not eligible to participate in the Concurrent
Exchange Offer and the Concurrent Consent Solicitation. Between the
Exchange Offer and the Concurrent Exchange Offer, Monitronics is
offering to exchange up to $585,000,000 aggregate principal amount
of New Notes for validly tendered (and not validly withdrawn) Old
Notes.
Under the terms of the Exchange Offer and the
Consent Solicitation, tenders of Old Notes may be withdrawn and
Consents may be revoked prior to 5:00 p.m., New York City time, on
January 10, 2019, but not thereafter, subject to limited
exceptions, unless such time is extended. The Exchange Offer will
expire at 11:59 p.m., New York City time, on January 10, 2019 (such
time and date, as the same may be extended, the “Expiration Time”).
The New Notes will be secured on a second
priority basis by liens on all of the outstanding stock of
Monitronics and on substantially all of the assets of Monitronics
and the guarantors of the New Notes, which have also been pledged
on a first priority basis as collateral to secure Monitronics’ and
such guarantors obligations under Monitronics’ existing senior
secured credit agreement (the “Credit Facility”). Interest payable
in cash will accrue at a rate of 5.500% per annum and interest
payable by increasing the aggregate principal amount of the
outstanding New Notes or by issuing additional New Notes will
accrue at a rate of 6.500% per annum.
The Exchange Offer
Upon the terms and conditions set forth in the
offering memorandum and consent solicitation statement dated
December 11, 2018 (the “Offering Memorandum”), Monitronics is
offering holders of Old Notes the opportunity to receive New Notes
in exchange for their Old Notes. Participating holders that validly
tender (and do not validly withdraw) Old Notes prior to the
Expiration Time will receive $1,000 principal amount of New Notes
per $1,000 principal amount of such Old Notes (the “Exchange
Consideration”). The following summarizes the exchange
consideration for each $1,000 aggregate principal amount of Old
Notes that is validly tendered (and not validly withdrawn) by
participating holders.
|
Title of Old Notes to be Tendered |
|
CUSIP/ISINNumbers |
|
Outstanding Principal
Amount(1) |
|
Exchange Consideration(2) |
|
|
9.125%
Senior Notes due 2020 |
|
609453AG0 / US609453AG02 |
|
$585,000,000 |
|
$1,000
aggregate principal amount of New Notes |
|
___________________________________
(1) Aggregate principal amount of Old Notes
outstanding as of December 7, 2018 (including those Old Notes which
have been tendered pursuant to the Concurrent Exchange Offer but
not accepted for purchase).(2) All participating holders will
receive, in cash, accrued and unpaid interest, if any, on their
accepted Old Notes from the last interest payment date to, but not
including, the settlement date for the Exchange Offer (the
“Settlement Date”).
The Consent Solicitation
In connection with the Exchange Offer, and on
the terms and subject to the conditions set forth in the Offering
Memorandum, Monitronics is soliciting consents from registered
holders of Old Notes to the Proposed Amendments to the Old Notes
Indenture. Holders who tender their Old Notes into the Exchange
Offer will be deemed to have submitted their Consent. As of the
date of the Offering Memorandum, holders representing approximately
80.67% of the aggregate outstanding principal amount of the Old
Notes have tendered their Old Notes in connection with the
Concurrent Exchange Offer. Therefore, Monitronics has executed a
supplemental indenture giving effect to the Proposed Amendments,
but the Proposed Amendments therein will not become operative until
immediately prior to the acceptance of such Old Notes pursuant to
the Exchange Offer and the Concurrent Exchange Offer on the
Settlement Date.
The Proposed Amendments would (i) eliminate or waive substantially
all of the restrictive covenants and events of default contained in
the Old Notes Indenture and the Old Notes, and (ii) modify or
eliminate certain other provisions contained in the Old Notes
Indenture and the Old Notes, including certain provisions relating
to defeasance and to the minimum notice requirements for optional
redemption. In addition, any Old Notes that remain outstanding
following the consummation of the Exchange Offer will become
effectively subordinated to the New Notes to the extent the value
of the collateral securing the New Notes, which is comprised of all
of outstanding stock and substantially all of the assets of
Monitronics and its subsidiaries.
Concurrent Exchange Offer and Consent
Solicitation
Monitronics today announced that it has extended
the early tender time and expiration of the Concurrent Exchange
Offer and Concurrent Consent Solicitation to 11:59 p.m., New York
City time, on January 10, 2019. The withdrawal deadline for
the Concurrent Exchange Offer and Concurrent Consent Solicitation
has passed and Old Notes tendered pursuant thereto may no longer be
validly withdrawn except for under the limited circumstances
described in the offering memorandum for the Concurrent Exchange
Offer.
The Concurrent Exchange Offer is being made only
(a) in the United States to holders of Old Notes who are reasonably
believed to be “qualified institutional buyers” (as defined in Rule
144A under the Securities Act) and (b) outside the United States to
holders of Old Notes who are persons other than U.S. persons in
reliance upon Regulation S under the Securities Act.
General
Consummation of the Exchange Offer is
conditioned upon the satisfaction or waiver of the conditions
specified in the Offering Memorandum, including, among others, the
following: (i) an amendment to Monitronics’ Credit Facility, which
amendment, among other things, permits issuance of the New Notes,
shall have become effective on or prior to the Expiration Time and
(ii) the issuance of New Notes to eligible holders that tendered
Old Notes pursuant to the Concurrent Exchange Offer. These
conditions and the other conditions to the Exchange Offer are
described more fully in the Offering Memorandum. The Exchange Offer
and the Consent Solicitation and/or the Concurrent Exchange Offer
and the Concurrent Consent Solicitation may be amended, extended,
terminated or withdrawn by Monitronics for any reason in its sole
discretion.
Monitronics will not receive any cash proceeds
from the Exchange Offer, the Consent Solicitation or the issuance
of the New Notes in connection with the Exchange Offer. The New
Notes will be issued pursuant to an indenture, dated as of the
Settlement Date, among Monitronics, the guarantors party thereto
and Ankura Trust Company, as trustee and collateral agent. The New
Notes will be fully and unconditionally guaranteed, jointly and
severally, on a senior secured second priority basis by each of
Monitronics’ restricted subsidiaries, including all of Monitronics’
subsidiaries that own any of its material assets.
The Exchange Offer is being made, and
the New Notes are being offered, in reliance on the exemption from
the registration requirements of the Securities Act of 1933, as
amended (the “Securities Act”), provided under Section 3(a)(9) of
the Securities Act.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy the New Notes or any
other securities, nor shall there be any offer, solicitation or
sale of the New Notes or any other securities in any state or other
jurisdiction in which such an offer, solicitation or sale would be
unlawful. The offering documents will be distributed only to
holders of the Old Notes.
D.F. King & Co., Inc. is acting as the
Exchange Agent and Information Agent for the Exchange Offer and the
Consent Solicitation. Requests for the offering documents from
holders may be directed to D.F. King & Co., Inc. by e-mail to
monitronics@dfking.com or by phone at (212) 269-5550 (for brokers
and banks) or (877) 674-6273 (for all others).
None of Ascent, Monitronics, their subsidiaries
or any other person makes a recommendation as to whether holders of
the Old Notes should tender their Old Notes pursuant to the
Exchange Offer or deliver Consents pursuant to the Consent
Solicitation. Each holder must make its own decision as to whether
to tender its Old Notes and to deliver Consents, and, if so, the
principal amount of the Old Notes as to which action is to be
taken.
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 issuance of the New Notes and other matters that are not
historical facts. Words such as “believes,” “estimates,”
“anticipates,” “intends,” “expects,” “projects,” “plans,” “seeks”
“may,” “will,” “should,” and similar expressions 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, without limitation, the ability of
Monitronics to satisfy the conditions to the settlement of the
Exchange Offer, the Consent Solicitation, the Concurrent Exchange
Offer and the Concurrent Consent Solicitation, general market and
economic conditions, changes in law and government regulations and
other matters affecting the business of Monitronics, and the other
risks described in the Offering Memorandum. These forward-looking
statements speak only as of the date of this press release, and
Ascent and Monitronics expressly disclaim any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
their 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 Monitronics,
including the most recent Forms 10-K and 10-Q for additional
information about Monitronics and about the risks and uncertainties
related to Monitronics'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 SecurityTM, 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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