Amscan attracts institutional attention and gains GECC as administrative agent

By Sara Rosenberg and Paul A. Harris

New York, April 15 - Amscan Holdings Inc.'s newly launched $250 million credit facility (B1/B+) had already received "lots of commitments" only a few hours after the bank meeting and General Electric Capital Corp. signed on to the deal as administrative agent, according to a market source.

The facility consists of a $50 million revolver and a $200 million term loan B. Price talk is not available yet, the source said.

Goldman Sachs is the lead bank on the deal.

Proceeds will be used to help support Amscan's recapitalization, which will also be funded through the launch of $175 million of subordinated bonds next week.

Total leverage following the transactions will be 5.7x total and 3x bank.

As part of Amscan's recapitalization via Berkshire Partners and Weston Presidio, the company will merge with AAH Acquisition Corp., a newly-formed corporation affiliated with AAH Holdings Corp., an entity jointly controlled by affiliates of Berkshire Partners and Weston Presidio, according to a company news release. GS Capital Partners II LP, and certain other funds managed by or affiliated with Goldman Sachs & Co., which currently own about 71% of Amscan, will transfer all of their equity interests in the company.

The total value of the transaction, including equity and debt, is about $540 million, with the equity portion estimated to be around $240 million.

In connection with the transaction, Amscan will begin a cash tender offer to purchase any and all of its outstanding 9.875% senior subordinated notes due 2007.

The merger, which is expected to close in mid-2004, is subject to customary conditions including the approval of Amscan stockholders, the availability of financing, the expiration of antitrust waiting periods and certain other conditions. Shareholders of Amscan representing about 99% of the outstanding Amscan stock have agreed to vote in favor of the transaction.

Amscan is an Elmsford, N.Y., decorative party goods company.

Western Wireless filling up

Western Wireless Corp.'s $1 billion seven-year term loan B has attracted investor interest since launching into the primary this past Wednesday, with the syndicate said to already be in the "process of building [the] book" by Thursday morning and the tranche seen as "progressing nicely at this point," according to a market source.

The fact that the book is building is not much of a surprise being that "attendance was unbelievable with approximately 150 in total at [the] meeting and on [the] phone," the source added.

The term loan B is priced with an interest rate of Libor plus 275 basis points.

Western Wireless' $1.5 billion credit facility also contains a $300 million six-year revolver with an interest rate of Libor plus 225 basis points and a $200 million six-year term loan A with an interest rate of Libor plus 225 basis points.

Wachovia and JPMorgan are the lead banks on the deal.

Proceeds will be used to refinance the company's existing senior secured credit facility. The company opted to come to market with the new deal due to the current attractive market conditions, a company news release previously explained.

Western Wireless is a Bellevue, Wash., provider of wireless communications services.

Pegasus Satellite lower

Pegasus Satellite Television Inc.'s bank debt was down about a half a point to a point on Wednesday's late day news that the company was ordered by a court to make a relatively large payment to DirecTV, according to a trader.

Pegasus Satellite's paper was quoted at 99¾ bid, par ¾ offered. Pegasus Communications Corp.'s (the parent company) term loan D, however, held steady at 102 bid, 103 offered, the trader said.

Under the court ruling, DirecTV was awarded $52 million in the lawsuit concerning disputed billings under the seamless marketing agreement between Pegasus Satellite and DirecTV.

"We are disappointed in the jury's verdict and believe that our claims in regards to DirecTV's billings in the seamless marketing agreement are meritorious. We will be giving careful consideration to our legal options respecting the verdict, including our rights of appeal," said Cheryl Crate, vice president of communications for Pegasus, in a company news release.

Pegasus Communications is a Bala Cynwyd, Pa., diversified media and communications company.

Allegheny up on Midwest bond deal

Allegheny Energy Inc.'s bank debt was up a hair on Midwest Generation LLC's ability to get its bond deal done on Thursday, according to a trader.

The Hagerstown, Md., utility holding company's term loan B was quoted at par ½ bid, par ¾ offered, and the term loan C was quoted at par ¾ bid, 101 offered. Both tranches were said to be higher by about an eighth to a quarter of a point, the trader added.

On Thursday, Midwest Generation and Midwest Finance Corp. sold $1 billion of putable second priority senior secured notes at par to yield 8¾%.

Proceeds from the notes combined with proceeds from a $700 million term loan that's currently in-market will be used to refinance $693 million of debt due in December owed by its direct parent, Edison Mission Midwest Holdings Co., and to make termination payments under the Collins Station lease in the amount of about $970 million.

The $700 million seven-year first priority secured institutional term loan (Ba3/B+) is priced with an interest rate of Libor plus 325 basis points. Citigroup, Credit Suisse First Boston, JPMorgan and Lehman Brothers are the lead banks on the deal.

The company's credit facility also contains a $200 million revolver. The revolver will be used for working capital and will replace the existing working capital facility under which nothing is currently drawn.

Security for the term loan and the revolver is a first lien on substantially all of the coal fired generating plants owned by Midwest Generation.

Midwest Generation is a Chicago electric company.

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