S&P: PEI Holdings unaffected

Standard & Poor's said the ratings on PEI Holdings Inc. (B/positive/--), a wholly owned subsidiary of Playboy Enterprises Inc., are not affected following the announcement of a cash tender offer for all $80 million of its 11% senior secured notes due 2011.

In connection with the tender offer, the company is seeking consent from bondholders to eliminate substantially all restrictive covenants and to release all related guarantees and collateral.

The buyback transaction would be funded by available cash, borrowing under the company's revolving credit facility, new debt financing, or a combination of these.

S&P said Playboy had a good fourth quarter in 2004 with higher contributions from its television and online businesses. The company's credit measures continue to improve with most of its businesses showing good operating momentum.

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