Bloomberg News

Party City Offers $700 Million Debt for Thomas H. Lee Buyout

July 18, 2012

Party City Corp., the largest U.S. party-supplies retailer, is planning to sell $700 million of bonds to help fund its buyout by Thomas H. Lee Partners LP.

The company, which filed for an IPO last year, may sell eight-year notes to yield about 9.125 percent, according to a person familiar with the transaction. Proceeds also will be used to repay debt.

The bonds may be rated Caa1, the fifth-lowest level of speculative-grade, by Moody’s Investors Service, the ratings company said in a July 13 release. Bank of America Corp., Deutsche Bank AG, Barclays Plc, Goldman Sachs Group Inc. and Morgan Stanley are managing the sale, said the person, who asked not to be identified because the terms are private.

Party City has not previously issued bonds, according to data compiled by Bloomberg.

The bonds may price as soon as tomorrow, the person said. The new bonds will be issued by PC Merger Sub.

Party City, which was founded in 1947 as a wholesale party supplier, filed (PRTY:US) April 2011 to raise as much as $350 million in an IPO that was never completed. Thomas H. Lee’s purchase gives the private equity firm a majority stake in a chain with about 825 owned and franchised party superstores and about 400 temporary Halloween stores, according to an IPO prospectus filed on May 10.

Party City’s existing owners -- Advent International Corp., Berkshire Partners LLC, Weston Presidio and company management - - will hold minority stakes, Boston-based Thomas H. Lee said June 5 in a statement announcing the agreement.

To contact the reporter on this story: Sarika Gangar in New York at;

To contact the editor responsible for this story Alan Goldstein at;

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