Moody’s downgrades ADT, debt

Moody's Investors Service said it downgraded the first-lien debt of Prime Securities Services Borrower, LLC (doing business as ADT Corp.) to Ba3 from Ba2 and affirmed the B1 corporate family rating and B3 second-lien debt rating.

The action results from ADT's intention to raise $800 million of incremental first-lien term loan debt and use the proceeds to make a $795 million dividend distribution to its owners, primarily Apollo Global Management.

The outlook remains stable.

Moody’s said the downgrade on the first-lien debt stems from the higher proportion of first-lien debt in the capital structure, as a result of the $800 million incremental term loan borrowings, relative to the (unchanged) $3.14 billion of second-lien notes and $750 million of preferred securities (which have been cash-paying their about 11% coupon).

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