Affinity Group buys back $14.6 million senior notes

New York, June 8 - Affinity Group Holding., Inc. bought back $14.6 million of its 10 7/8% senior notes due 2012 as part of a bank facility amendment completed on June 5, according to a 10-K filing with the Securities and Exchange Commission.

Funding came from a $9.7 million second lien loan due July 31, 2010 that was priced at 9%.

The note buybacks were made in conjunction with a credit facility amendment that extended the maturity date to March 31, 2010 from June 24, 2009.

As part of the amendment, the revolver was reduced to $25 million from $35 million and outstanding term loan borrowings were repaid by $8 million.

In addition, pricing was increased to Libor plus 800 basis points with a 2.75% Libor floor and financial covenants were revised.

As a condition to the amendment, the shareholder of the parent company was required to arrange for the purchase of $26.6 million of the term loan debt by new lenders, enhance the yield to such new lenders, purchase notes held by one of such new lenders at a premium to the most recent market price, contribute $5 million in capital and guarantee two required principal payments on the term loans, aggregating $15 million.

In consideration of the support, the company entered into an option agreement with the shareholder of the parent company, under which the shareholder can purchase the company's Camping World subsidiary for $55 million on or before March 1, 2010.

Lastly, the company agreed to use its best efforts to secure an asset-based loan of at least $18.5 million secured by the inventory and receivables of its subsidiary, Camping World Inc.

Proceeds from the asset-based loan would be used to further reduce the amounts outstanding under the senior credit facility.

If a Camping World Financing has not been completed by Sept. 15, pricing on revolving loans and terms loans will increase to Libor plus 1,000 bps.

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

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