Research Update: Verisure Affirmed At 'B' On Planned Refinancing And Dividend Payment Balanced By Strong EBITDA Growth

Security services provider Verisure plans to issue €1 billion of senior secured debt and €100 million of unsecured notes to refinance €630 million of existing senior secured notes and pay dividends of €350 million. We expect that the debt increase will be balanced by strong EBITDA growth, with debt to EBITDA of about 7.7x at year-end 2018, compared with 7.9x in 2017. We are therefore affirming our 'B' ratings on Verisure Midholding AB, its subsidiary, and its senior secured debt. We are also assigning our 'B' rating to the proposed senior secured notes. The stable outlook reflects our expectation that over the next 12 months Verisure's net subscriber growth of 12%-13% will lead to strong revenue and EBITDA growth that

...+ Security services provider Verisure plans to issue 1 billion of senior secured debt and 100 million of unsecured notes to refinance 630 million of existing senior secured notes and pay dividends of 350 million. + We expect that the debt increase will be balanced by strong EBITDA growth, with debt to EBITDA of about 7.7x at year-end 2018, compared with 7.9x in 2017. + We are therefore affirming our 'B' ratings on Verisure Midholding AB, its subsidiary, and its senior secured debt. We are also assigning our 'B' rating to the proposed senior secured notes. + The stable outlook reflects our expectation that over the next 12 months Verisure's net subscriber growth of 12%-13% will lead to strong revenue and EBITDA growth that more than offsets the modest rise in debt, while installation costs will result in free operating cash flow remaining negative until at least 2020....

Research Update