Affinity to defer interest payment to consider investment proposals

By Caroline Salls

Pittsburgh, Aug. 14 - Affinity Group Holding, Inc. plans to defer the $6.2 million interest payment due Aug. 15 on its notes due 2012 as it considers four proposals from potential equity investors in connection with a proposed refinancing or restructuring of its debt, according to a 10-Q filed Friday with the Securities and Exchange Commission.

The proposals being considered involve between $50 million and $90 million of new cash equity investments. Under all of the investments, the company would be required to sell its Camping World subsidiary to an affiliate of the investor.

A significant portion of the equity investments would be used to make offers to the holders of Affinity Group, Inc.'s senior subordinated notes due 2012 and the holding company's notes due 2012 to exchange their notes for a combination of cash and new bonds with an extended maturity date and lower face value.

The company said it has hired a financial adviser to seek equity capital in connection with a possible refinancing or restructuring of Affinity Group's senior credit facility, $9.7 million principal amount of second-lien loan debt, $137.8 million outstanding principal amount of senior subordinated notes due 2012 and $112 million outstanding principal amount of notes due 2012.

As of June 30, there was $119.1 million principal amount of term loans outstanding under the credit agreement and $3 million principal amount under the revolving credit line.

During the 30-day grace period for making the interest payment on the notes, the company said it plans to discuss possible alternative capital structures after a presumed cash equity investment with the bondholders, including possible discounts for early payment and exchanges of existing securities for new securities.

Affinity Group is a Ventura, Calif.-based direct marketing company.

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