S&P rates Monitronics loan B

Standard & Poor’s said it assigned a B rating to Monitronics International Inc.’s incremental $350 million term loan due 2022 with a recovery rating of 3.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The company will use $50 million of the proceeds to pay down the outstanding balance on its revolving credit facility and the remainder will be used to repay $295 million of its existing term loan due 2018.

The company will continue to use a combination of cash flow from operations and additional debt to finance acquisitions of new subscribers from its network of third-party dealers, as well as through acquisitions of other alarm-monitoring companies, S&P said.

The corporate credit rating on Monitronics remains at B with a stable outlook, reflecting the company’s weak business risk profile and highly leveraged financial risk profile, the agency said. The ratings on the company’s existing debt also are unchanged, S&P said.

Leverage metrics remain essentially unchanged following the transaction, S&P said.

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