American Achievement to buy back $104.3 million PIK notes, amends notes

By Jennifer Chiou

New York, Feb. 25 - American Achievement Group Holding Corp. entered into an agreement to repurchase $104.3 million of its senior pay-in-kind notes due Oct. 1, 2012, according to an 8-K filing with the Securities and Exchange Commission.

The company previously said that the interest rate on the notes increased to 16¾% from 14¾% on Aug. 30.

American Achievement said it will pay $24 million for the notes.

Holders also consented to a second supplemental indenture for no additional consideration, removing substantially all of the restrictive and reporting covenants under the indenture as well as certain events of default and related provisions.

As already reported, the interest rate increased because the condition referred to in the second sentence of section (1)(b) of the note indenture was not met, according to a previous 8-K.

The notes were issued in June 2006 with a 12¾% coupon that was increased to 14¾% in March 2007 for the same reason.

American Achievement is a scholastic products company based in Austin, Texas.

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