Party City marketing $725 million five-year senior secured notes; initial talk 9½%-10%

By Paul A. Harris

Portland, Ore., Feb. 9 – Party City Holdco Inc. began a roadshow on Tuesday for a $725 million offering of five-year senior secured notes (expected ratings Caa1/CCC), according to market sources.

Initial talk has the Rule 144A and Regulation S notes coming to yield 9½% to 10%.

The deal is expected to price on Thursday.

J.P. Morgan Securities LLC is the lead.

The notes come with 2.5 years of call protection.

The issuing entity will be Party City Holdings Inc., a wholly owned subsidiary of Party City Holdco.

The Elmsford, N.Y.-based owner of retail party supplies stores plans to use the proceeds to pay off its term loan due in 2022 and for general corporate purposes, including debt repurchases.

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