Monitronics announces new exchange offer, extension of existing offer

By Sarah Lizee

Olympia, Wash., Dec. 11 – Ascent Capital Group, Inc.’s wholly owned subsidiary Monitronics International, Inc. launched a new offer to exchange its 5½%/6½% senior secured second-lien cash pay/pay-in-kind notes due 2023 for validly tendered 9 1/8% senior notes due 2020, according to a press release.

The new exchange offer is being made concurrently with, and on the same terms as, the company’s existing offer to exchange the notes announced on Nov. 5 and is available to any holders that are not eligible to participate in the existing exchange offer.

Between the new exchange offer and the existing one, Monitronics is offering to exchange up to $585 million of 5½%/6½% notes for validly tendered 9 1/8% notes.

Participating holders that validly tender their 9 1/8% notes by the expiration time, 11:59 p.m. ET on Jan. 10, will receive $1,000 principal amount of 5½%/6½% notes per $1,000 principal amount of 9 1/8% notes.

The company said the existing exchange offer deadline and early tender time was also extended to 11:59 p.m. ET on Jan. 10.

As previously reported, Monitronics posted early results of the existing exchange on Nov. 20. Holders had tendered $469,957,000 of the 9 1/8% notes by the original early deadline set for 5 p.m. ET on Nov. 19, and the early deadline was extended to 11:59 p.m. on Dec. 3.

In the existing exchange offer, the total exchange value is par of new notes for each $1,000 principal amount of notes tendered for exchange by the early deadline.

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.

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 was 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.

As Monitronics has received consents from holders of greater than a majority of the outstanding principal amount of old notes, it will enter into a supplemental indenture giving effect to the proposed amendments, according to Tuesday’s update.

Holders who tender their notes for exchange are 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.

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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