Party City Holdco Inc. (together with its subsidiaries, the
“Company”) today announced that:
- its previously announced Exchange Offers, Consent Solicitations
and Rights Offering (each as defined below) each have expired in
accordance with their terms;
- approximately 84.7% of the Existing Notes (as defined below)
were validly tendered and accepted for exchange by the Company in
the Exchange Offers;
- in connection with the closing of the Exchange Offers, the
Company has waived the related minimum participation condition;
and
- the Exchange Offers and the Rights Offering are expected to
settle on or about July 30, 2020 (the “Settlement Date”).
The Company’s announcement relates to its previously announced
(i) offers to exchange (the “Exchange Offers”) any and all of the
outstanding (x) $350,000,000 aggregate principal amount of existing
unsecured 6.125% Senior Notes due 2023 (the “2023 Notes”) and (y)
$500,000,000 aggregate principal amount of existing unsecured
6.625% Senior Notes due 2026 (the “2026 Notes” and, together with
the 2023 Notes, the “Existing Notes”) issued by its wholly-owned
subsidiary Party City Holdings, Inc. (“Holdings”) for: (A) shares
of common stock of the Company, par value $0.01 per share (the
“Common Stock”); (B) 5.00% Cash/PIK / 5.00% PIK Senior Secured
Second Lien Notes due 2026 (the “Second Lien Anagram Notes”) to be
co-issued by Anagram Holdings, LLC, a wholly owned subsidiary of
Holdings (“Anagram LLC”), and Anagram International, Inc., a
Minnesota corporation and direct subsidiary of Holdings, which
shall become a wholly owned subsidiary of Anagram LLC upon the
consummation of the Exchange Offers (together with Anagram LLC, the
“Anagram Issuers”); (C) Floating Rate Senior Secured First Lien
Notes due 2025 (the “First Lien Party City Notes”) to be issued by
Holdings; and (D) Subscription Rights (as defined below); (ii)
consent solicitations (the “Consent Solicitations”), whereby the
Company solicited consents (the “Consents”) from eligible holders
to certain proposed amendments (the “Proposed Amendments”) to the
indentures governing the Existing Notes (the “Existing Notes
Indentures”); and (iii) rights offering (the “Rights Offering”),
pursuant to which certain eligible holders of Existing Notes had
the right (the “Subscription Right”), but not the obligation, to
subscribe for $48.82 aggregate principal amount of 10.00% Cash /
5.00% PIK Senior Secured First Lien Notes due 2025 (the “First Lien
Anagram Notes”) to be issued by the Anagram Issuers, for each
$1,000 principal amount of Existing Notes such eligible holders
validly tendered in the Exchange Offers. Each of the Exchange
Offers, the Consent Solicitations and the Rights Offering was
conducted upon the terms and subject to the conditions set forth in
a confidential offering memorandum, dated as of June 26, 2020, as
amended, supplemented, modified and updated by Supplement No. 1,
dated July 2, 2020, and Supplement No. 2, dated July 9, 2020 (as so
amended, supplemented, modified and updated, the “Offering
Memorandum”).
The Exchange Offers, the Consent Solicitations and the Rights
Offering expired at 11:59 p.m., New York City time, on July 24,
2020 (such time and date, the “Expiration Time”). As of the
Expiration Time, based on information provided by Epiq Corporate
Restructuring, LLC, the information and exchange agent for the
Exchange Offers and Consent Solicitations and the subscription
agent for the Rights Offering, (i) approximately $719.8 million in
aggregate principal amount of the Existing Notes, representing
approximately 93.5% of the aggregate outstanding principal amount
of the 2023 Notes and approximately 78.6% of the aggregate
outstanding principal amount of 2026 Notes, had been validly
tendered and accepted for exchange by the Company in connection
with the Exchange Offers, (ii) sufficient Consents to effectuate
the Proposed Amendments to each of the Existing Notes Indentures
had been delivered and (iii) approximately $19.9 million in
aggregate principal amount of the First Lien Anagram Notes had been
subscribed for and accepted in the Rights Offering.
In addition, the Company today announced that it has waived the
minimum participation condition applicable to the Exchange Offers
as further described in the Offering Memorandum.
On the terms and subject to the conditions set forth in the
Offering Memorandum, concurrently with the settlement of the
Exchange Offers and the Rights Offering, the Company expects to
issue approximately $90.1 million (including fees) in aggregate
principal amount of additional First Lien Anagram Notes to certain
backstop commitment parties and private placement commitment
parties. As a result, on the Settlement Date, the Company expects
to (a) issue (i) $110.0 million aggregate principal amount of First
Lien Anagram Notes, (ii) $84.7 million aggregate principal amount
of Second Lien Anagram Notes, (iii) approximately $161.7 million
aggregate principal amount of First Lien Party City Notes and (iv)
approximately 15.9 million shares of Common Stock, and (b) enter
into supplemental indentures to the Existing Notes Indentures
effectuating the Proposed Amendments.
This communication is for informational purposes only and does
not constitute an offer to sell, or a solicitation of an offer to
buy, any security and does not constitute an offer, solicitation or
sale of any security in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The Exchange Offers, the
Rights Offering and related transactions are being made in reliance
on the exemption from registration provided by Section 4(a)(2) of
the Securities Act of 1933 (the “Securities Act”), have not been
registered with the Securities and Exchange Commission (the
“Commission”) and rely on exemptions under state securities
laws.
The Exchange Offers, the Rights Offering and related
transactions have not yet settled and may not occur on the terms
described in this press release or at all.
About Party City
Party City Holdco Inc. is the leading party goods company by
revenue in North America and, we believe, the largest vertically
integrated supplier of decorated party goods globally by revenue.
The Company is a popular one-stop shopping destination for party
supplies, balloons, and costumes. In addition to being a great
retail brand, the Company is a global, world-class organization
that combines state-of-the-art manufacturing and sourcing
operations, and sophisticated wholesale operations complemented by
a multi-channel retailing strategy and e-commerce retail
operations. The Company is the leading player in its category,
vertically integrated and unique in its breadth and depth. The
Company designs, manufactures, sources and distributes party goods,
including paper and plastic tableware, metallic and latex balloons,
Halloween and other costumes, accessories, novelties, gifts and
stationery throughout the world. The Company’s retail operations
include approximately 850 specialty retail party supply stores
(including franchise stores) throughout North America operating
under the names Party City and Halloween City, and e-commerce
websites, principally through the domain name PartyCity.com.
Forward-Looking Statements
This release includes statements that constitute
“forward-looking statements” within the meaning of Section 21E
of the Exchange Act and Section 27A of the Securities Act.
Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or
trends and similar expressions concerning matters that are not
historical facts, such as statements regarding our future financial
condition or results of operations, our prospects and strategies
for future growth and the development and introduction of new
products. In many cases you can identify forward-looking statements
by terms such as “believes,” “anticipates,” “expects,” “targets,”
“estimates,” “intends,” “will,” “may” or “plans” and similar
expressions. These forward-looking statements reflect our current
expectations and are based upon data available to us at the time
the statements were made. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ
materially from expectations for reasons, among others, including
(i) our ability to negotiate definitive documentation and close the
Refinancing Transactions (as defined in the Offering Memorandum),
(ii) the possibility that the Refinancing Transactions are
delayed or do not close, including due to the inability to obtain
required financing or the failure of other closing conditions,
(iii) general financial or market conditions, (iv) the
availability of alternative transactions, and (v) those
factors described in the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections and elsewhere in the Company’s Annual Report
on Form 10-K (“Annual Report”) and those factors described in
the “Risk Factors” section and elsewhere in the Company’s Quarterly
Report on Form 10-Q, both filed with the Commission, as may be
supplemented by other reports the Company files with the
Commission. Moreover, the Company operates in a very competitive
and rapidly changing environment. New risks emerge from time to
time. It is not possible for management of the Company to predict
all risks, nor can the Company assess the impact of all factors on
its business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements the Company may make.
All forward-looking statements are qualified by these cautionary
statements. The Company undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
ContactsInvestor
RelationsFarah Soi / Rachel
SchacterICR203-682-8200InvestorRelations@partycity.com
Media RelationsLeigh Parrish / Barrett Golden /
Andrew SquireJoele Frank, Wilkinson Brimmer Katcher212-355-4449
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