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S&P lowers Monitronics
S&P said it lowered its issuer credit rating on Monitronics International Inc. to CC from CCC. The outlook is negative.
At the same time, the agency lowered its issue-level rating on the company's $1.1 billion first-lien term loan due 2022 to CC from CCC. The recovery rating remains 3, indicating expectations for meaningful (50%-70%; rounded estimate: 65%) recovery upon a payment default.
Lastly, S&P lowered the issue-level rating on the senior unsecured notes to C from CC. The 6 recovery rating remaining unchanged, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of payment default.
The downgrade follows Monitronics' announcement on Aug. 30 of a proposed transaction to exchange its 9 1/8% senior unsecured notes due 2020 for a combination of new $585 million cash and paid-in-kind (PIK) (7¾% cash and 3¾% PIK) unsecured notes due 2023, up to $100 million of cash from parent company Ascent and warrants. Monitronics is also proposing amendments to eliminate the restrictive covenants governing the 2020 notes, including certain events of default.
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