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S&P rates APX notes B-
S&P said it assigned a B- rating and 3 recovery rating to APX Group Inc.'s $250 million proposed senior secured notes due in 2024.
The 3 recovery rating indicates 50% to 70% expected default recovery.
APX Group, also known as Vivint, will use the proceeds to refinance a portion of its 8¾% senior unsecured notes due in 2020.
The B- issuer credit rating reflects the company's narrow focus, limited geographic diversification and elevated leverage while competing in the highly fragmented U.S. residential alarm monitoring industry, S&P said.
The expectations include, among other things, company's substantial cash used as part of its customer acquisition strategy, leveraging its vast product variety in the growing smart home monitoring segment, the agency said.
Partially offsetting these risks is the recurring revenue model coupled with strong subscriber growth trends, S&P said.
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