New Issue: American Color Graphics sells $280 million seven-year notes to yield 10%

By Paul A. Harris

St. Louis, June 19 - American Color Graphics Inc. sold $280 million of senior second secured notes due June 15, 2010 (B3/B) at par Thursday to yield 10%, according to a syndicate source.

Price talk was for a yield of 10%-10¼%.

Morgan Stanley and Banc of America Securities were joint bookrunners on the Rule 144A deal. Credit Suisse First Boston was co-manager.

Proceeds will be used to redeem the 12¾% senior subordinated notes due 2005, to repay the credit facility, to repurchase all outstanding preferred shares and cancel all outstanding options to purchase the preferred stock of ACG Holdings, Inc.

The issuer is based in Brentwood, Tenn.

Issuer:	American Color Graphics Inc.
Amount:	$280 million
Maturity:	June 15, 2010
Security description:	Senior second secured notes
Bookrunners:	Morgan Stanley, Banc of America Securities
Co-manger:	Credit Suisse First Boston
Coupon:	10%
Price:	Par
Yield:	10%
Spread:	711 basis points
Call features:	Callable on June 15, 2007 at 105.0, then at 102.50, declining to par on June 15, 2009 and thereafter
Equity clawback:	Until June 15, 2006 for 355 at 110.0
Settlement date:	July 3, 2003
Ratings:	Moody's: B3
	Standard & Poor's: B
Rule 144A Cusip:	025169AB9
Price talk:	10%-10¼%

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