Moody’s rates Central Security loans B2 & Caa2

Moody's Investors Service said it assigned a corporate family rating of B3 to Central Security Group, a B2 facility rating to its new first-lien term loan and revolving credit facility and a Caa2 rating to its second-lien term loan.

The outlook is stable.

Proceeds will be used to refinance existing debt and pay a dividend to CSG's private equity owners, Summit Partners.

The B3 corporate family rating reflects CSG's weaker leverage metrics relative to its alarm-monitoring peers, very small scale and an aggressive growth strategy that will entail significant utilization of its revolving credit facility.

Moody's said it expects continued, steady revenue growth supported by strong industry fundamentals and, because of incremental borrowings needed to support subscriber growth, persistently high leverage, as measured by debt/RMR in the mid-40s. The ratings are supported by good profitability measures, industry-leading attrition rates and an experienced management team that Moody’s believes can spearhead growth within a leveraged operating environment.

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