NEW YORK, — Stroock & Stroock & Lavan LLP on behalf of the holders (the “Disclosing Noteholders”) of over 65% in principal amount of the 9.125% Senior Notes due 2020 (the “Senior Notes”) issued by Monitronics International, Inc. (the “Company”) are publicly disclosing information to supplement the disclosure made by the Company and its parent entity, Ascent Capital Group, Inc. (“Ascent”), in their respective Form 8-K Reports issued on August 17, 2018 (collectively, the “8-K”). The Disclosing Noteholders are members of an ad hoc group of holders of Senior Notes that is being advised by Stroock & Stroock & Lavan LLP and Houlihan Lokey, Inc.
As stated in the 8-K, the Company proposed to the Disclosing Noteholders an exchange of the Senior Notes into new unsecured notes of the Company along with a tender offer for Senior Notes by Ascent using up to $100 million of Ascent’s cash (as described more fully below) and the Disclosing Noteholders proposed to the Company an exchange of the Senior Notes into new second lien secured notes of the Company along with a repayment of the Company’s term loan of $100 million. The proposal by the Disclosing Noteholders provided that the second lien note exchange would be the preferred alternative and that the Disclosing Noteholders would support an unsecured note exchange only if the second lien note exchange proved unsuccessful. The Company and the Disclosing Noteholders and their respective advisors engaged in negotiations over these proposals between August 2, 2018 and August 17, 2018. To the knowledge of the Disclosing Noteholders, the Company did not present any of the proposals that were discussed to the holders of the Company’s term loans or revolving loans.
The last proposal made by the Company to the Disclosing Noteholders for both the second lien note exchange and the unsecured note exchange included the following elements:
A. Second Lien Note Exchange
B. Tender Offer and Unsecured Note Exchange
While the Disclosing Noteholders engaged in good faith negotiations with the Company to reach agreement on the terms of the proposed exchange offers, they rejected the Company’s last proposal. The Company and the Disclosing Noteholders subsequently were unable to reach an agreement and, as disclosed in the 8-K, have ceased discussions.
Prior to the discussions with the Company, certain holders of the Senior Notes that collectively hold more than 65% in principal amount of the Senior Notes, including certain of the Disclosing Noteholders, entered into a cooperation agreement, dated July 31, 2018 (the “Cooperation Agreement”), which, among other things, requires the consent of each such noteholder for any such noteholder to agree to the terms of a transaction with the Company relating to a restructuring of the Company’s indebtedness. The Cooperation Agreement currently expires on September 29, 2018.
No assurances can be made that (a) any transaction described herein or other transaction involving the Senior Notes will be implemented or (b) any definitive agreements will be reached between the Company and the Disclosing Noteholders with respect to the Senior Notes.