ADT units sign upsized $650 million term facility to redeem 2023 notes

By William Gullotti

Buffalo, N.Y., March 15 – ADT Inc. subsidiaries Prime Security Services Borrower, LLC and ADT Security Corp. consummated a debt commitment from Sept. 15, 2022 on March 14, entering a $600 million term loan credit agreement with Barclays Bank plc as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The senior secured term loan A facility, which matures March 14, 2028, was amended at signing to further include an additional $50 million of incremental term loans under the same terms.

As previously reported Sept. 15, 2022, the maturity date is 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.

Proceeds will be used to complete the redemption of ADT Security Corp.’s $600,001,000 4 1/8% senior notes due 2023 at maturity.

As previously reported, 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.

Deutsche Bank Securities Inc., BNP Paribas, Mizuho Bank, Ltd., MUFG Bank, Ltd., Citizens Bank, NA, Citibank, NA, Morgan Stanley Senior Funding, Inc. and Royal Bank of Canada are the joint lead arrangers.

ING Capital LLC and Credit Suisse AG, New York Branch are the co-managers.

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

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