Ascent Capital Group, Inc. (“Ascent”) (NASDAQ: ASCMA) today
announced that its wholly owned subsidiary, Monitronics
International, Inc. (“Monitronics”), launched an offer to exchange
(the “Exchange Offer”) up to $585,000,000 aggregate principal
amount of Monitronics’ 5.500%/6.500% Senior Secured Second Lien
Cashpay/PIK Notes due 2023 (the “New Notes”) to be issued for
validly tendered (and not validly withdrawn) Monitronics’ 9.125%
Senior Notes due 2020 (the “Old Notes”) and, in conjunction with
the Exchange Offer, a solicitation (the “Consent Solicitation”) of
consents (the “Consents”) by Monitronics to certain proposed
amendments (the “Proposed Amendments”) to the indenture governing
the Old Notes (the “Old Notes Indenture”). 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 Monitronics’ and such guarantors obligations under
Monitronics’ existing senior secured credit agreement (the “Credit
Facility”). Interest payable in cash will accrue at a rate of
5.500% per annum and interest payable by increasing the aggregate
principal amount of the outstanding New Notes or by issuing
additional New Notes will accrue at a rate of 6.500% per annum.
Tenders of Old Notes may be withdrawn and Consents may be revoked
prior to 5:00 p.m., New York City time, on November 19, 2018 (the
“Early Tender Time”), but not thereafter, subject to limited
exceptions, unless such time is extended. The Exchange Offer will
expire at 11:59 p.m., New York City time, on December 10, 2018
(such time and date, as the same may be extended, the “Expiration
Time”).
The Exchange Offer
Upon the terms and conditions set forth in the
offering memorandum and consent solicitation statement (the
“Offering Memorandum”), Monitronics is offering Eligible Holders
(as described below) of Old Notes the opportunity to receive New
Notes in exchange for their Old Notes. Participating holders that
validly tender (and do not validly withdraw) Old Notes prior to the
Early Tender Time will receive $1,000 principal amount of New Notes
per $1,000 principal amount of such Old Notes (the “Exchange
Consideration”). Participating holders that validly tender (and do
not validly withdraw) Old Notes after the Early Tender Time but
prior to the Expiration Time will receive $950 principal amount of
New Notes per $1,000 principal amount of such Old Notes (the “Late
Exchange Consideration”). The following summarizes the exchange
consideration for each $1,000 aggregate principal amount of Old
Notes that is validly tendered (and not validly withdrawn) by
participating holders.
|
Title of Old
Notes to be Tendered |
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CUSIP/ISINNumbers |
|
EarlyTenderTime |
|
Outstanding
Principal Amount(1) |
|
Exchange
Consideration(2) |
|
Late Exchange
Consideration(2) |
|
|
9.125% Senior Notes due
2020 |
|
609453AG0
/US609453AG02 |
|
5:00 p.m., New York City
time, November 19, 2018 |
|
$585,000,000 |
|
$1,000 aggregate principal
amount of New Notes |
|
$950 aggregate principal
amount of New Notes |
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(1) Aggregate principal amount of
Old Notes outstanding as of November 2, 2018. |
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(2) All participating holders will
receive, in cash, accrued and unpaid interest, if any, on their
accepted Old Notes from the last interest payment date to, but not
including, the settlement date for the Exchange Offer (the
“Settlement Date”). |
|
The Consent Solicitation
In connection with the Exchange Offer, and on
the terms and subject to the conditions set forth in the Offering
Memorandum, Monitronics is soliciting consents from registered
holders of Old Notes to the Proposed Amendments to the Old Notes
Indenture, which will become effective upon execution; however, the
Proposed Amendments will become operative immediately prior to the
acceptance of such Old Notes pursuant to the Exchange Offer on the
Settlement Date. Holders who tender their Old Notes into the
Exchange Offer will be deemed to have submitted their Consent.
The Proposed Amendments would (i) eliminate or waive substantially
all of the restrictive covenants and events of default contained in
the Old Notes Indenture and the Old Notes, and (ii) modify or
eliminate certain other provisions contained in the Old Notes
Indenture and the Old Notes, including certain provisions relating
to defeasance and to the minimum notice requirements for optional
redemption. In addition, any Old Notes that remain
outstanding following the consummation of the Exchange Offer will
become effectively subordinated to the New Notes to the extent the
value of the collateral securing the New Notes, which is comprised
of all of outstanding stock and substantially all of the assets of
Monitronics and its subsidiaries.
General
As previously announced, Monitronics and Ascent
are party to an Amended and Restated Transaction Support Agreement
(the “Amended and Restated Support Agreement”) with, among others,
certain holders collectively owning or controlling approximately
65% of the aggregate outstanding principal amount of the Old Notes
(collectively, the “Consenting Noteholders”). Pursuant to the
Amended and Restated Support Agreement, the Consenting Noteholders
have agreed to tender or cause to be tendered all Old Notes held by
such Consenting Noteholders (other than Old Notes in denominations
of less than $1,000, if applicable) and take all commercially
reasonable actions, and support and cooperate with Monitronics and
Ascent to take all commercially reasonable actions, necessary to
consummate the Exchange Offer and the Consent Solicitation in
accordance with the terms and conditions of the Amended and
Restated Support Agreement, including without limitation to vote in
favor of, or otherwise support, the transactions contemplated
thereunder, including the Exchange Offer and the Consent
Solicitation.
Consummation of the Exchange Offer is
conditioned upon the satisfaction or waiver of the conditions
specified in the Offering Memorandum, including, among others, the
following: (i) an amendment to Monitronics’ Credit Facility, which
amendment, among other things, permits issuance of the New Notes,
shall have become effective on or prior to the Expiration Time,
(ii) at least 65% in aggregate principal amount of Old Notes,
including by participating holders who are party to the Amended and
Restated Support Agreement, shall have been validly tendered (and
not validly withdrawn) in the Exchange Offer prior to the
Expiration Time and (iii) the Amended and Restated Support
Agreement shall not have been terminated (with respect to
Monitronics or the Requisite Consenting Noteholders (as defined
therein)) pursuant to its terms. These conditions and the other
conditions to the Exchange Offer are described more fully in the
Offering Memorandum. The Exchange Offer and the Consent
Solicitation may be amended, extended, terminated or withdrawn by
Monitronics for any reason in its sole discretion.
Monitronics will not receive any cash proceeds
from the Exchange Offer, the Consent Solicitation or the issuance
of the New Notes in connection with the Exchange Offer. The New
Notes will be issued pursuant to an indenture, dated as of the
Settlement Date, among Monitronics, the guarantors party thereto
and Ankura Trust Company, as trustee and collateral agent. The New
Notes will be fully and unconditionally guaranteed, jointly and
severally, on a senior secured second priority basis by each of
Monitronics’ restricted subsidiaries, including all of Monitronics’
subsidiaries that own any of its material assets.
The New Notes have not been and will not be
registered under the Securities Act of 1933, as amended (the
“Securities Act”) or the securities laws of any other jurisdiction
and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act or in any other jurisdiction
absent registration or an applicable exemption from the
registration requirements of the securities laws of such other
jurisdiction.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy the New Notes or any
other securities, nor shall there be any offer, solicitation or
sale of the New Notes or any other securities in any state or other
jurisdiction in which such an offer, solicitation or sale would be
unlawful. The offering documents will be distributed only to
holders of the Old Notes that complete and return a letter of
eligibility to D.F. King & Co., Inc., as Exchange Agent and
Information Agent, confirming that they are “Eligible Holders” (as
further defined in the letter of eligibility) for the purposes of
the Exchange Offer and the Consent Solicitation.
D.F. King & Co., Inc. is acting as the
Exchange Agent and Information Agent for the Exchange Offer and the
Consent Solicitation. Requests for the offering documents from
“Eligible Holders” may be directed to D.F. King & Co., Inc. and
holders of the Old Notes may complete and submit a letter of
eligibility online at www.dfking.com/monitronics or by e-mail to
monitronics@dfking.com or by phone at (212) 269-5550 (for brokers
and banks) or (877) 674-6273 (for all others).
None of Ascent, Monitronics, their subsidiaries
or any other person makes a recommendation as to whether holders of
the Old Notes should tender their Old Notes pursuant to the
Exchange Offer or deliver Consents pursuant to the Consent
Solicitation. Each holder must make its own decision as to whether
to tender its Old Notes and to deliver Consents, and, if so, the
principal amount of the Old Notes as to which action is to be
taken.
Forward Looking Statements
This press release includes certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
about the issuance of the New Notes and other matters that are not
historical facts. Words such as “believes,” “estimates,”
“anticipates,” “intends,” “expects,” “projects,” “plans,” “seeks”
“may,” “will,” “should,” and similar expressions 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, without limitation, the ability of
Monitronics to satisfy the conditions to the settlement of the
Exchange Offer and the Consent Solicitation, general market and
economic conditions, changes in law and government regulations and
other matters affecting the business of Monitronics, and the other
risks described in the Offering Memorandum. These forward-looking
statements speak only as of the date of this press release, and
Ascent and Monitronics expressly disclaim any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
their 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 Monitronics,
including the most recent Forms 10-K and 10-Q for additional
information about Monitronics and about the risks and uncertainties
related to Monitronics' 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 SecurityTM, 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
Ascent Capital Grp. - Series A (NASDAQ:ASCMA)
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Ascent Capital Grp. - Series A (NASDAQ:ASCMA)
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