ADT unit gets commitment for up to $600 million to redeem 2023 notes

By Wendy Van Sickle

Columbus, Ohio, Sept. 15 – ADT Inc. subsidiary Prime Security Services Borrower, LLC entered into a debt commitment letter with Deutsche Bank Securities Inc., Deutsche Bank AG New York Branch, BNP Paribas, Mizuho Bank, Ltd., MUFG Bank, Ltd., Citizens Bank, N.A., Citigroup Global Markets Inc., Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, Barclays Bank PLC, ING Capital LLC and Credit Suisse AG, New York Branch, according to an 8-K filing with the Securities and Exchange Commission.

The banks committed to provide up to $600 million of term loans under a senior secured term loan A facility on or before March 15, 2023.

The proceeds of any borrowings under the term loan A must be used to redeem a portion of ADT Security Corp.’s 4 1/8% senior notes due 2023.

The term loan A will have a maturity date of five years from the initial funding, subject to a springing maturity of 91 days prior to the maturity date of certain long-term debt of the borrower and its subsidiaries if, on such date, the total principal amount of the debt is at least $100 million. The term loan A will require scheduled amortization payments in annual amounts equal to 5% of the original principal amount, payable quarterly, with the balance payable at maturity.

Borrowings will bear interest at term SOFR plus an adjustment of 10 basis points, plus a margin of 250 bps, subject to adjustment between a range from 200 bps to 275 bps, depending on net first lien leverage ratio.

Debt under the term loan A will be guaranteed, jointly and severally, on a senior secured first-priority basis, by Prime Security Services Holdings, LLC and by substantially all of the borrower’s wholly owned material domestic subsidiaries.

ADT is a Boca Raton, Fla., security services company.

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