Ascent subsidiary enters $175 million facility; loan drawn upon for Monitronics acquisition

By Jennifer Chiou

New York, Dec. 23 - Ascent Media Corp.'s direct wholly owned subsidiary, Monitronics International, Inc., entered into a credit agreement with Bank of America, NA as administrative agent for a $60 million term loan and a $115 million revolving credit facility on Dec. 17, according to an 8-K filing with the Securities and Exchange Commission.

Also on Dec. 17, Ascent used cash on hand, proceeds from the sale of marketable securities and $105 million of borrowings under the new $175 million credit facility to acquire 100% of the outstanding capital stock of Monitronics through the merger of Mono Lake Merger Sub, Inc. with and into Monitronics, with Monitronics as the surviving corporation.

Borrowings under the facility will bear interest at Libor plus 350 basis points through June 30, 2011; Libor plus 400 bps from July 1, 2011 through Dec. 31, 2011; and Libor plus 450 bps thereafter.

The revolver bears interest at Libor plus 400 bps.

There is a Libor floor of 150 bps per year and a 50 bps commitment fee.

The term loan matures on June 30, 2011 and requires principal installments of $20 million on Dec. 31, 2011 and March 31, 2012, while the revolver is due on Dec. 17, 2013.

The 8-K stated that the terms of the credit facility include customary representations and warranties, mandatory prepayments, affirmative and negative covenants and events of default.

In addition, Monitronics must maintain a total leverage ratio of no more than 2.75 to 1 through Sept. 30, 2011 and no more than 2.50 to 1 thereafter as well as a fixed-charge coverage ratio of not less than 2.50 to 1.

Based in Englewood, Colo., Ascent Media provides creative and network services to the media and entertainment industries in the United States, the United Kingdom and Singapore.

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