Deluxe Entertainment introduces covenant change to $600 million eight-year secured notes

By Paul A. Harris

St. Louis, Oct. 7 - Deluxe Entertainment Services introduced a covenant change to its planned $600 million offering of eight-year senior secured first-lien notes (B1/B) now in the market, an informed source said Wednesday.

The change requires the company to put up a yearly $25 million offering to purchase notes at par, in each year beginning in 2010.

Price talk will be announced on Thursday. The deal is expected to price on Friday.

Credit Suisse Securities and J.P. Morgan Securities Inc. are joint bookrunners for the Rule 144A offering.

The notes come with four years of call protection. However the company may redeem 10% of the issue at 103.0 each year during the non-call period.

Proceeds will be used to refinance bank debt.

The prospective issuer is a Hollywood, Calif.-based digital cinema services company.

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