Ascent Capital Group, Monitronics International and Ad Hoc Group of MONI Senior Noteholders Amend and Restate Transaction Sup...
October 30 2018 - 5:22PM
Ascent Capital Group, Inc. (“Ascent”) (NASDAQ: ASCMA) and its
wholly owned subsidiary, Monitronics International, Inc. (“MONI”),
today announced that Ascent, MONI, and the Requisite Consenting
Noteholders (as defined in the Amended Transaction Support
Agreement (as defined below)), which provide the requisite consent
for noteholders holding $380 million or 65% of MONI’s 9.125% Senior
Notes due 2020 (such noteholders, the “Consenting MONI Senior
Noteholders”, and such notes, the “Old MONI Notes”) have amended
and restated the existing Transaction Support Agreement, originally
dated September 24, 2018, among Ascent, MONI and the Consenting
MONI Senior Noteholders (as amended and restated through the date
hereof, the “Amended Transaction Support Agreement”) and that
holders of more than 50% of MONI’s $1.1 billion term loan (the
“Term Loan” and such holders of the Term Loan, the “Consenting Term
Loan Lenders”) under MONI’s Amended and Restated Credit Agreement,
dated as of March 23, 2012, among MONI, as borrower, Bank of
America, N.A., as administrative agent and letter of credit issuer,
Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch, as
co-syndication agents, U.S. Bank National Association, as
documentation agent and the lenders from time to time party thereto
(as subsequently amended from time to time, the “Credit Agreement”)
have joined and agree to be bound by the Amended Transaction
Support Agreement. Pursuant to the terms of the Amended
Transaction Support Agreement, the Consenting Term Loan Lenders
have agreed to consent to certain amendments of the Credit
Agreement that governs the Term Loan to accommodate the proposed
second lien exchange and related transactions (the “Proposed
Exchange Transactions”) contemplated in the Amended Transaction
Support Agreement and the related Term Sheet annexed thereto (the
“Term Sheet”), which collectively set forth the terms and
conditions of the Proposed Exchange Transactions. The
Proposed Exchange Transactions will be subject to certain terms and
conditions, including those more particularly described in the
Amended Transaction Support Agreement and the Term Sheet annexed
thereto. When available, a confidential offering memorandum
relating to the Proposed Exchange Transactions and setting forth
these terms and conditions will be distributed to eligible holders.
For additional information regarding the Proposed Exchange
Transactions, please see Ascent’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on October 30, 2018,
which includes as an exhibit thereto the Amended Transaction
Support Agreement together with the Term Sheet annexed thereto.
Under the Amended Transaction Support Agreement,
consistent with the original Transaction Support Agreement, 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 Amended
Transaction Support Agreement, the Consenting MONI Senior
Noteholders have agreed to support and fully participate in such
offer. The new deadline for Ascent and Moni to commence
solicitation of the Proposed Exchange Transaction is November 2,
2018.
In addition, MONI would seek to amend the Credit
Agreement and the related agreements and documents to permit, among
other things, the issuance by MONI of MONI Second Lien Notes and
provide certain covenant relief for the operating business. The per
annum interest rate payable to term loan lenders that consent to
the amendments to the Credit Agreement would be increased by 100
basis points and the per annum interest rate payable to Revolving
Credit Lenders (as defined in the Credit Agreement) that consent to
the amendments to the Credit Agreement would be increased by 75
basis points. The Credit Agreement will also provide for the
termination of the accordion features of the Term Loan and the
Revolving Loan and will eliminate the ability to incur Incremental
Equivalent Debt under the Credit Agreement. The amortization
of the Term Loan would be increased in amount to $9,375,000 per
quarter for eight quarters commencing on the first quarterly
payment date after the effective date of the Proposed Exchange
Transactions. The term loan lenders that consent to the amendment
to the Credit Agreement shall also be entitled to call protection
following the effective date of the amendment of 102% in the first
year, 101% in the second year and par thereafter. Ascent
would contribute $75 million to MONI to be used for working capital
purposes. MONI intends to formally solicit consents from the
Revolving Credit Lenders and the holders of the Term Loan to
implement the Proposed Exchange Transactions. The deadline
for submitting consents to the Credit Agreement amendment will be
5:00 p.m., New York City time, on November 2,
2018.
As previously disclosed, if the requisite
majority consents to amend the Term Loan or the Revolving Loans are
not received, Ascent and MONI will instead implement the unsecured
exchange offer contemplated by the Amended Transaction Support
Agreement, which does not require any consents from holders of the
Term Loan or the Revolving Credit Lenders.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any debt or equity
securities of Ascent or MONI, or any other securities, nor shall
there be any offer, solicitation or sale of any debt or equity
securities of Ascent or MONI 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. 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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