Moody’s rates ADT loan Ba3

Moody’s Investors Service said it rated ADT’s (Prime Security Services Borrower, LLC) $600 million five-year term senior secured loan Ba3.

The agency concurrently affirmed its ratings on the issuer, including the Ba3 and B3 ratings on its first-lien and second-lien debt, respectively.

ADT will use the proceeds to redeem a portion of its $700 million, of 4 1/8% senior secured notes due 2023 (issued at the ADT Security Corp. subsidiary level), which became a current obligation as of June 30.

Moody’s said it improved ADT’s speculative grade liquidity rating to SGL-2 from SGL-3 and revised the outlook to positive from stable. The agency also assigned a positive outlook to co-borrower ADT Security.

“The positive outlook reflects Moody's anticipation that if ADT's primary operating metrics––revenue, attrition, creation multiples, steady-state-free-cashflow to debt leverage, and debt/RMR leverage – continue to improve over the next 12 to 18 months while the company adopts more balanced financial strategies, including an emphasis upon financial leverage reduction rather than shareholder returns or debt-financed acquisitions, ADT's credit profile would be improved,” Moody’s said in a press release.

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