ADT plans $750 million revolver, $2.5 million term debt with spin-off

By Jennifer Chiou

New York, April 10 - ADT Corp. expects to enter into a new $750 million five-year unsecured senior revolving credit facility and issue $2.5 billion of term debt in connection with its spin-off from Tyco International Ltd., according to a 10-12B filing with the Securities and Exchange Commission.

The spread on the new facility, which the company expects to enter into prior to the spin-off, will be based on credit ratings. Proceeds are earmarked for working capital, capital expenditures and other general corporate purposes.

ADT noted that it expects that Tyco initially will guarantee the new credit facility.

As for the term debt, the $2.5 billion is expected to preserve the company's investment-grade ratings and provide access to both the short-term and long-term capital markets.

Following the transaction, the company said that its capital structure and sources of liquidity will change significantly from its historical capital structure as it will no longer participate in cash management and funding arrangements with Tyco.

ADT stated that its funding will depend on its ongoing ability to generate cash from operations and to access the bank borrowing facilities and capital markets.

The company said that it expects to have about $300 million of cash on hand at the time of the distribution.

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