S&P rates APX loans, notes B

S&P said it gave B issue and 2 recovery ratings (rounded estimate: 75%) to APX Group Holdings Inc.’s (Vivint) planned $1.6 billion first-lien credit facility and $600 million of senior secured notes due 2027 . The facility will consist of a five-year $350 million revolver and a seven-year $1.25 billion term loan. Additionally, the company plans to secure $900 million of unrated unsecured debt.

Vivint will use the proceeds to repay its $940.5 million outstanding first-lien term loan due 2025, $677 million of 7 7/8% senior secured notes due 2022, $400 million of 7 5/8% senior notes due 2023 and $225 million of 8½% senior secured notes due 2024, with the balance financing related fees and expenses. The $600 million of 6¾% senior secured notes due 2027 remain outstanding.

The agency also revised its outlook on Vivint to stable from negative and affirmed all its ratings, including the B- issuer credit rating.

“The stable outlook reflects our expectation for adjusted leverage of about 5x over the next year with adjusted EBITDA margins in the low-40% area and FOCF/debt in the low- to mid-single-digit-percent range, driven by mid-single-digit organic growth rates organic growth and a stable attrition profile in the 12%-13% area.,” S&P said in a press release.

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