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Party City might pay down credit facilities with stock proceeds
By Tali Rackner
Minneapolis, Jan. 21 - Party City Holdco Inc. plans to use the proceeds from a $500 million common stock offering to repay or repurchase debt, including amounts outstanding under its senior credit facilities, $700 million 8 7/8% senior notes or $350 million senior PIK toggle notes, according to an S-1 filing with the Securities and Exchange Commission.
The credit facilities consist of a $400 million revolving credit facility and a $1.13 billion term loan.
Currently, there is no firm expectation as to how Party City will allocate the reduction of the debt among these borrowing arrangements, but it intends to determine the allocation following the completion of this offering based on a number of factors, including amounts remaining at maturity, applicable interest rates, available pricing of repurchases, repayments or redemptions, outstanding balance and ability to reborrow.
The company said it may also use the remaining portion of the net proceeds for working capital and other general corporate purposes.
Party City is a Rockaway, N.J.-based designer, manufacturer and distributor of party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts and stationery.
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