Monitronics International Inc. Downgraded To 'SD' On Missed Interest Payment

  • On April 1, 2019, U.S.–based residential alarm monitoring service provider Monitronics International Inc. elected not to make an approximately $26.7 million interest payment on its $585 million 9.125% unsecured notes due 2020 as it continues to evaluate its restructuring alternatives.
  • We believe Monitronics' decision to miss its interest payment is strategic given its efforts to negotiate with lenders to restructure the balance sheet.
  • Therefore, we lowered the issuer credit rating on Monitronics to 'SD' from 'CC'.
  • We also lowered the issue-level rating on the company's unsecured notes to 'D' from 'C' and affirmed the 'CC' issue-level rating on the company's $1.1 billion first-lien term loan due 2022.
NEW YORK (S&P Global Ratings) April 2, 2019--S&P Global Ratings today took the 
rating actions listed above. The downgrade follows Monitronics' election not 
to make an approximately $26.7 million in interest on its 9.125% unsecured 
notes due 2020. A payment default has not yet occurred under the indenture 
governing the notes, which provides a 30-day grace period. However, we believe 
the company will likely not meet its debt obligations with noteholders until 
it has agreed a financial restructuring plan with them. We do not view this 
action as a default on the first-lien term loan as the company entered a 
forbearance agreement through April 30, 2019. We will reevaluate the ratings 
upon the earlier of a strategic transaction or termination of the forbearance 
agreements. 

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