Party City Holdco Inc. (together with its subsidiaries, the
“Company”) today announced that as of July 10, 2020, more than 83%
of Existing Notes (as defined below) have participated in the
Exchange Offers (as defined below), including more than 93% of the
2023 Notes (as defined below) and more than 75% of the 2026 Notes
(as defined below), all as set forth in the table
below.
The Company has elected to extend the early participation time
relating 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”), representing up to
19.90% of the outstanding Common Stock at the expiration of the
Exchange Offers; (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, which is to be formed as a
wholly owned subsidiary of Holdings (“Anagram LLC”), and Anagram
International, Inc., an existing Minnesota corporation and a 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 is soliciting
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 have 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 tender in
the Exchange Offers. Each of the Exchange Offers, the Consent
Solicitations and the Rights Offering is being 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 early participation time relating to the Exchange Offers,
the Consent Solicitations and the Rights Offering has been extended
from 5:00 p.m., New York City time, on July 10, 2020 to 11:59 p.m.,
New York City time, on July 24, 2020, and such extended early
participation time (the “Extended Early Participation Time”), as it
may be further extended, shall now constitute the “Early
Participation Time” as defined in the Offering Memorandum;
provided, however, that the deadline to validly withdraw tenders of
Existing Notes for exchange, to revoke the related Consents and to
revoke the exercise of the related Subscription Rights was not
extended by the Company and expired at 5:00 p.m., New York City
time, on July 10, 2020 (the “Withdrawal Deadline”). Accordingly,
the Extended Early Participation Time will occur at the same time
the Exchange Offers and the Consent Solicitations are scheduled to
expire, and, given that the Withdrawal Deadline has now passed, any
tenders of Existing Notes for exchange, related Consents delivered
and related Subscription Rights exercised may no longer be
withdrawn or revoked, as applicable.
Except as described in this press release, all other terms of
the Exchange Offers, the Consent Solicitations and the Rights
Offering remain unchanged.
Based on information provided by Epiq Corporate Restructuring,
LLC (“Epiq”), the information and exchange agent for the Exchange
Offers and Consent Solicitations and the subscription agent for the
Rights Offering, Existing Notes were validly tendered and not
validly withdrawn at or prior to the Withdrawal Deadline pursuant
to the Exchange Offers in the principal amounts set forth
below:
Existing Notes |
|
CUSIP |
|
Outstanding Aggregate Principal Amount (in
millions) |
|
Aggregate Principal Amount Tendered as of the Withdrawal
Deadline (in millions) |
|
|
|
|
|
|
|
6.125% Senior Notes due 2023 |
|
144A: 702150AC7 Regulation S: U70268AB0 |
|
$350.0 |
|
$327.1 |
|
|
|
|
|
|
|
6.625% Senior Notes due 2026 |
|
144A: 702150AD5 Regulation S: U70268AC8 |
|
$500.0 |
|
$378.6 |
In addition, sufficient numbers of eligible holders delivered at
or prior to the Withdrawal Deadline the Consents necessary to
effectuate the Proposed Amendments to each of the Existing Notes
Indentures.
On the terms and subject to the conditions set forth in the
Offering Memorandum, eligible holders that validly tender Existing
Notes at or prior to the Extended Early Participation Time will
receive, for each $1,000 principal amount of Existing Notes
accepted for exchange, the Total Consideration (as defined in the
Offering Memorandum) constituting 22.1481 shares of Common Stock,
$117.65 principal amount of Second Lien Anagram Notes, $217.65
principal amount of First Lien Party City Notes and a Subscription
Right.
The settlement date (the “Settlement Date”) for the Exchange
Offers is expected to occur on or prior to the fourth business day
following the expiration of the Exchange Offers and the Consent
Solicitations.
Consummation of the Exchange Offers, the Consent Solicitations
and the Rights Offering is conditioned upon the satisfaction or
waiver of certain conditions set forth in the Offering Memorandum,
including, among other things, the valid tender and acceptance by
the Company of at least 98% of the aggregate principal amount of
Existing Notes in the Exchange Offers (the “Minimum Condition”). We
may waive or amend any of these conditions without providing
additional withdrawal rights. If we amend the Minimum Condition by
accepting fewer Existing Notes in the Exchange Offers or if we
waive the Minimum Condition entirely, the Company’s obligations
under the Existing Notes following the Settlement Date would be
greater than would have been the case had the Minimum Condition
been satisfied as originally proposed.
The Company is making the Exchange Offers, the Consent
Solicitations and the Rights Offering only to eligible holders of
Existing Notes through, and pursuant to, the terms of the Offering
Memorandum. None of the Company, the Consenting Noteholders (as
defined in the Offering Memorandum), the financial advisors of the
Company and the Consenting Noteholders, Epiq, the trustee with
respect to the Existing Notes, the trustees and collateral trustees
under the indentures that shall govern the First Lien Anagram
Notes, Second Lien Anagram Notes and First Lien Party City Notes or
any of their respective affiliates takes any position or makes any
recommendation as to whether or not eligible holders should tender
their Existing Notes in the Exchange Offers, deliver Consents
pursuant to the Consent Solicitations or participate in the Rights
Offering.
The Exchange Offers and the Consent Solicitations may not be
consummated on the terms described in this press release or at all.
The Company is obligated to consummate the Exchange Offers in
accordance with the terms described in the Offering Memorandum,
subject to the terms and conditions of the previously announced
transaction support agreement, dated May 28, 2020, as subsequently
amended, by and among the Company, certain of its affiliates and
certain holders of Existing Notes. The complete terms and
conditions of the Exchange Offers are set forth in the Offering
Memorandum.
Only eligible holders may receive a copy of the Offering
Memorandum and participate in the Exchange Offers, the Consent
Solicitations and the Rights Offering. Holders of Existing Notes
wishing to certify that they are eligible holders in order to be
eligible to receive a copy of the Offering Memorandum should
contact Epiq by emailing Tabulation@epiqglobal.com and referencing
“Party City” in the subject line to request an eligibility
letter.
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 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 and rely on exemptions under state securities laws.
The Exchange Offers and the Rights Offering are being made and
the Total Consideration is being offered and will be issued only:
(i) in the United States, to holders of Existing Notes who are (x)
“qualified institutional buyers” (as defined in Rule 144A under the
Securities Act) or (y) institutional “accredited investors” within
the meaning of Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D
under the Securities Act and (ii) outside the United States, to
holders of Existing Notes who are not “U.S. persons” (as defined in
Rule 902 under the Securities Act) in reliance on Regulation S of
the Securities Act. The holders of Existing Notes who are eligible
to participate in the Exchange Offers and the Rights Offering
pursuant to at least one of the foregoing conditions are referred
to herein as “eligible holders.”
About Party CityParty 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 StatementsThis 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 failure to receive
required participation by eligible holders of the Existing Notes,
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
Securities and Exchange Commission (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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