Monitronics offers 5˝%/6˝% PIK notes in exchange for 9 1/8% notes

By Susanna Moon

Chicago, Nov. 5 – Ascent Capital Group, Inc. said wholly owned subsidiary Monitronics International, Inc. is offering to exchange its $585 million principal amount 9 1/8% senior notes due 2020.

In exchange, the company is offering to issue 5˝%/6˝% senior secured second-lien cash pay/pay-in-kind notes due 2023.

The total exchange value will be par of new notes for each $1,000 principal amount of notes tendered for exchange by the early deadline of 5 p.m. ET on Nov. 19.

The early premium is $50 of new notes per $1,000 principal amount of notes tendered for exchange by the early deadline.

Holders who tender after the early deadline will receive $950 principal amount of new notes per $1,000 principal amount.

The exchange will remain open until 11:59 p.m. ET on Dec. 10.

Holders will also receive accrued interest to but excluding the settlement date in cash.

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 the obligations under Monitronics’ senior secured credit agreement.

In connection with the exchange, Monitronics is soliciting consents to amend the notes to eliminate or waive substantially all of the restrictive covenants and events of default and to modify or eliminate other provisions, including those relating to defeasance and to the minimum notice requirements for optional redemption, according to a press release.

Holders who tender their notes for exchange will be deemed to have given their consents.

Any 9 1/8% notes that remain outstanding after the exchange offer will become effectively subordinated to the new notes.

Holders representing about 65% of the old notes have agreed to tender in the offer.

The exchange is conditioned upon an amendment to Monitronics’ credit facility, which allows issue of the new notes and at least 65% of notes being tendered in the offer.

D.F. King & Co., Inc. (212 269-5550, 877 674-6273, monitronics@dfking.com or dfking.com/monitronics) is the exchange agent and information agent.

As announced Sept. 25, the companies terminated their exchange offer that had been set to run until 11:59 p.m. ET on Oct. 3 in lieu of a new proposed exchange.

The companies were originally offering to exchange Monitronics’ $585 million of 9 1/8% senior notes due 2020 for cash and/or new notes and warrants to purchase Ascent’s series A common stock.

The companies then said that they had executed a support agreement with holders of about $386 million principal amount, or 66%, of the 9 1/8% notes to exchange the issue for new second-lien notes.

Monitronics is a Dallas-based home security alarm monitoring company. Ascent Capital is a holding company based in Englewood, Colo.

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