Protection One amends loan, pushing out maturities and providing $75 million term loan add-on

By Sara Rosenberg

New York, Nov. 18 - Protection One Inc. amended its credit facility, extending the maturity by two years to March 31, 2014 on $203 million of the $289.5 million previously existing term loans, according to a news release.

In addition, the amendment increased the company's term loan borrowings by $75 million, with this incremental debt also due March 31, 2014.

The amendment also provides for a $15 million revolver due March 31, 2013 that was used to replace the previous $25 million revolver due on April 18, 2010.

The maturity dates of the new and extended term loans and revolver will accelerate to Dec. 14, 2012 if, on that date, the maturity date for the company's unsecured term loans is not extended to at least 91 days after March 31, 2014 or the unsecured term loans are not refinanced.

Pricing on the new and extended term loans and the revolver is Libor plus 425 basis points with a 2% Libor floor. The commitment fee on the revolver is 100 bps.

Non-extended term loan debt continues to be priced at Libor plus 225 bps.

The amendment was completed on Nov. 17.

JPMorgan acted as the bookrunner and lead arranger on the transaction.

"Our ability to generate over $40 million of cash in the first nine months of 2009 allowed us to redeem all $115.3 million of our senior secured notes with only a $75 million increase in our credit facility. As a result, total debt outstanding, excluding capital leases, is approximately $474.8 million upon completion of the refinancing, compared to $515.2 million as of Sept. 30, 2009," said Richard Ginsburg, president and chief executive officer, in the release.

"At current interest rates, we expect to achieve cash interest savings of approximately $1.5 million per year as a result of the refinancing in addition to creating additional flexibility with the extension of our debt maturities," Ginsburg added.

Protection One is a Lawrence, Kan.-based provider of sales, installation, monitoring, and maintenance of electronic security systems to homes and businesses.

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