Party City better with earnings; Imagine! Print reworks deal; Travel Leaders OID emerges

By Sara Rosenberg

New York, March 10 – Party City Holdco Inc.’s term loan B headed higher in the secondary market on Thursday following the company’s release of favorable fourth quarter earnings results.

Moving to the primary market, Imagine! Print Solutions LLC upsized its term loan B, set the spread at the low end of guidance and tightened the original issue discount as the tranche was oversubscribed by investors.

Additionally, Travel Leaders Group LLC released original issue discount talk on its add-on term loan with launch, and Western Digital Corp. set a bank meeting for pro rata lenders.

Party City gains

Party City’s term loan B strengthened in trading on Thursday as fourth quarter numbers were announced, according to a trader.

The term loan B was quoted at 98 bid, 99 offered, up from 97˝ bid, 98 offered, the trader said.

For the fourth quarter, the company reported net income of $86.5 million, or $0.72 per diluted share, compared to net income of $79 million, or $0.83 per diluted share, in the comparable period in the previous year. Diluted share earnings were affected by the IPO-related increase in share count to 120.3 million shares in fourth quarter 2015 from 94.8 million shares in fourth quarter 2014.

Total revenues for the quarter were $781.5 million, versus $804 million in the 2014 fourth quarter.

And, adjusted EBITDA for the quarter was $197.6 million, compared to $191 million in the prior year.

Also, during 2015, the company reduced leverage to 4.6 times adjusted EBITDA from 5.7 times.

Party City is an Elmsford, N.Y.-based party goods company.

Imagine! sets changes

Switching to the primary market, Imagine! Print Solutions lifted its six-year term loan B to $325 million from $320 million, firmed pricing at Libor plus 600 basis points, the tight end of the Libor plus 600 bps to 625 bps talk, modified the original issue discount to 98.5 from 97 and extended the 101 soft call protection to one year from six months, a source remarked.

As before, the term loan has a 1% Libor floor.

The company’s now $365 million credit facility (B2/B) also includes a $40 million five-year revolver.

Recommitments are due at 5 p.m. ET on Friday, the source continued.

RBC Capital Markets LLC and Societe Generale are leading the deal that will help fund the buyout of the company by Oak Hill Capital Partners from its founder, Bob Lothenbach, who will retain a significant minority ownership position.

The term loan B upsizing is being used to reduce the equity component for the buyout, the source added. Equity comprises about 50% of the transaction.

Closing is expected this quarter, subject to HSR approval and other customary conditions.

Imagine! is a Minneapolis-based provider of printed in-store marketing solutions.

Travel Leaders floats OID

Travel Leaders Group held its bank meeting on Thursday, and in connection with the event, original issue discount talk on its fungible $25 million add-on term loan (B+) was announced as 98.75, a market source said.

As previously reported, the add-on term loan is priced at Libor plus 600 bps with a 1% Libor floor, which matches existing term loan pricing.

Commitments are due on March 18, the source said.

UBS AG is leading the debt that will be used to add liquidity for potential acquisitions.

In addition to the add-on term loan, the company is seeking technical amendments to its credit facility, for which lenders are offered a 12.5 bps consent fee, the source added.

Travel Leaders is a Plymouth, Minn.-based travel agency company.

Western Digital pro rata

Western Digital scheduled a bank meeting for Tuesday to launch the pro rata portion of its credit facility, according to a market source. A bank meeting for the term loan B has not yet been set.

The $10 billion credit facility is expected to consist of a $1 billion revolver, a $3 billion five-year term loan A and a $6 billion seven-year term loan B, the company disclosed in filings with the Securities and Exchange.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC are leading the deal that will be used with Western Digital stock, $1 billion of secured notes and $4.1 billion of unsecured notes to fund the acquisition of SanDisk Corp. and refinance existing debt.

SanDisk is being bought for $78.80 per share, or about $17 billion. Assuming no closing cash shortfall, Western Digital will pay $67.50 in cash and 0.2387 shares of common stock per SanDisk share.

Closing is expected in the second quarter, subject to shareholder approval at both companies, regulatory approvals and other customary conditions.

Western Digital is an Irvine, Calif.-based developer and manufacturer of storage solutions for digital content. SanDisk is a Milpitas, Calif.-based provider of flash storage solutions.

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