Party City $1.45 billion credit facility nets early interest, bridge loan completely sells out

By Sara Rosenberg

New York, July 5 - Party City Holdings Inc.'s buyout financing credit facility is already surrounded by some positive chatter from investors ahead of its bank meeting, and although official price talk is not yet out, the anticipation is that terms will be fairly comparable to the recently allocated Savers Inc. transaction.

Party City's $1.45 billion credit facility is seeing some good feedback from potential lenders as the $700 million bridge loan backing the bonds has already gone through its syndication process, with the result being that the bridge is totally sold, according to a market source.

The credit facility, which is set to launch with a bank meeting on July 10, consists of a $400 million ABL revolver and a $1.05 billion term loan.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., Morgan Stanley Senior Funding Inc. and Barclays Capital Inc. are leading the deal that will be used with a $700 million notes offering to fund the purchase of the Rockaway, N.J.-based designer, manufacturer and distributor of party goods by Thomas H. Lee Partners LP in a transaction valued at $2.69 billion.

Advent International Corp., Berkshire Partners LLC, Weston Presidio and management, which currently own Party City, will continue to hold significant minority stakes following the recapitalization.

Party City compared to Savers

Price talk on Party City's credit facility has not yet surfaced, but, the source said, that people are expecting the pricing to come in the same vicinity as the recent Savers deal given that it "is a pretty solid comp."

Savers, a Bellevue, Wash.-based thrift store chain, wrapped syndication of its $655 million seven-year term loan B late last month at pricing of Libor plus 500 basis points with a 1.25% Libor floor and an original issue discount of 99.

During the negotiation process, Savers firmed the B loan spread at the low end of the Libor plus 500 bps to 525 bps guidance and tightened the original issue discount from talk of 98 to 981/2.

Savers trading atop par

Savers' term loan B, which broke for trading late last week, is being quoted in the par ¼ bid, par ¾ offered area in the secondary market and has been at those same levels for the past few days, according to traders.

On the day that the debt freed up, it was seen as high as par ½ bid.

Goldman Sachs & Co., Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the lead banks on Savers' credit facility.

Proceeds from the $730 million senior secured credit facility (Ba3/B), which also includes a $75 million five-year revolver, are being used to fund the buyout of the company by Leonard Green & Partners LP, TPG, chairman Thomas Ellison and management from Freeman Spogli & Co.

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