New Issue: Palace Entertainment prices $430 million six-year notes at par to yield 8 7/8%

By Paul A. Harris

Portland, Ore., Feb. 18 - Palace Entertainment Holdings priced a $430 million issue of six-year senior secured notes (B2/B-/) at par to yield 8 7/8% on Friday, according to an informed source.

The yield printed on top of yield talk, which had been revised downward from initial talk of 9% to 9¼%.

Morgan Stanley & Co. Inc. and Credit Suisse Securities were the joint bookrunners.

The notes were issued via Palace Entertainment Holdings, LLC and Palace Entertainment Holdings Corp.

Proceeds will be used to repay debt.

The issuer is a Newport Beach, Calif., operator of water parks and family entertainment centers.

Issuers:	Palace Entertainment Holdings, LLC, Palace Entertainment Holdings Corp.
Amount:	$430 million
Maturity:	April 15, 2017
Securities:	Senior secured notes
Bookrunners:	Morgan Stanley & Co. Inc., Credit Suisse Securities
Coupon:	8 7/8%
Price:	Par
Yield:	8 7/8%
Spread:	614 bps
Call features:	Make-whole call at Treasuries plus 50 bps until April 15, 2014, then callable at 104.438, 102.219, par on and after April 15, 2016
Equity clawback:	35% at 108.875 until April 15, 2014
Trade date:	Feb. 18
Settlement date:	Feb. 28
Ratings:	Moody's: B2
	Standard & Poor's: B-
Distribution:	Rule 144A and Regulation S for life
Price talk:	8 7/8%, decreased from 9% to 9¼%
Marketing:	Roadshow

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