Standard & Poor’s Lowers Ratings for Protection One

NEW YORK

Standard & Poor’s Ratings Services has lowered its ratings
for alarm monitoring firm Protection One Inc. while
forecasting the company’s outlook as “negative.” Meanwhile,
the Topeka, Kan.-based company has new leadership atop its
board. S&P lowered the company’s credit rating from “CC”
to “CCC” and affirmed its “C” subordinated debt rating on
April 9.

Protection One, which was sold by Westar Energy Inc. to New York-based investment firm Quadrangle Group LLC on Feb. 13, stated in a recent filing with the Securities and Exchange Commission (SEC) that it was negotiating a debt restructuring that might include filing for Chapter 11 bankruptcy.

“The ratings downgrade reflects the company’s projected insufficient liquidity and cash flows relative to its debt burden, combined with the loss of Westar as a source of external capital, the near-term expiration of its standstill agreement with Quadrangle and covenant breaches associated with change in control provisions under Protection One’s note issues,” S&P credit analyst Ben Bubeck told Forbes magazine.

On March 31, Protection One named Ben Enis as its new chairman of the board. Enis, a former professor of marketing at the University of Southern California, has been a member of Protection One’s board since 1994 and has also been a member of the board of Countrywide Financial Corp. He also provides marketing consulting services through Enis Marketing Counsel/Communication.

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