Amscan first and second lien break below par; Southwest Sports trades up from break

By Sara Rosenberg

New York, Dec. 23 - Amscan Holdings Corp.'s first- and second-lien term loans were being quoted in the 99's on Friday after freeing for trading in that context really late in the day on Thursday.

Meanwhile, Southwest Sports Group Inc.'s term loan traded higher in Friday's quiet pre-holiday session when compared to Thursday's breaking levels.

Amscan's $325 million first-lien term loan (B1/B+) was being quoted at 99 bid, 99¼ offered on Friday and its $65 million second-lien term loan (B3/B) was being quoted at 99 bid, par offered - with levels basically unchanged from where they broke late Thursday, according to a trader.

The first-lien term loan is priced with an interest rate of Libor plus 300 basis points, contains call protection of 102 in year one and 101 in year two, and was originally issued to investors at a discount of 99. During syndication, the tranche was downsized by $95 million from $420 million, and the call premiums and OID were added to the deal.

The second-lien term loan is priced with an interest rate of Libor plus 500 basis points, is non-callable for two years, and then callable at 102 in year three and 101 in year four, and was originally issued to investors at a discount of 98. This second-lien tranche was added to the credit structure during syndication when the size of the first-lien term loan was reduced.

Amscan's $475 million credit facility also contains an $85 million revolver (B1/B+) with an interest rate of Libor plus 300 basis points.

Goldman Sachs and Bank of America are the lead banks on the deal that will be used to help back the leveraged buyout of Party City Corp. by Berkshire Partners LLC and Weston Presidio - who already own Amscan.

To compensate for the $95 million first-lien downsizing and only $65 million second-lien addition, the sponsor will contribute an additional $30 million of equity, on top of the already committed $132 million equity contribution.

Under the terms of the LBO agreement, Party City shareholders will receive $17.50 per share in cash for each share of common stock outstanding for total consideration of approximately $360 million.

Party City is a Rockaway, N.J., party goods chain. Amscan is an Elmsford, N.Y., designer, manufacturer and distributor of decorative party goods.

Southwest Sports ticks up

Southwest Sports' $260 million term loan headed higher on Friday, moving up to the 101 bid, 101½ offered context, according to a trader.

The paper had freed for trading rather quietly during Thursday's session around par ¼ bid, par ¾ offered, the trader added.

The term loan is priced with an interest rate of Libor plus 250 basis points.

Southwest Sports' $300 million credit facility also contains a $40 million revolver with an interest rate of Libor plus 250 basis points.

Goldman Sachs and JPMorgan are the lead banks on the deal, with Goldman the left lead.

Southwest Sports is a Frisco, Texas-based holding company formed by Thomas Hicks to house interests in the Texas Rangers professional baseball team and the Dallas Stars pro hockey team, as well as to own various real estate properties in Dallas.

WCI closes

Meanwhile WCI Communities, Inc. completed a new $300 million senior unsecured term loan with an interest rate of Libor plus 200 basis points.

WCI also executed a swap to effectively fix that rate at 6.9% for the life of the loan.

KeyBanc Capital Markets and Wachovia Securities were joint lead arrangers with KeyBanc Capital Markets as bookrunner.

Proceeds will be used to buy back the majority of the company's 10 5/8% senior subordinated notes due 2011.

WCI is a Bonita Springs, Fla., builder of traditional and tower residences in lifestyle communities.

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