Party City enters restructuring pact with senior secured noteholder group

Party City Holdco announced that it has entered into an agreement with an ad hoc group of holders of more than 70% of the company’s senior secured first lien notes to support an expedited restructuring that would substantially reduce PCHI’s debt and optimize its capital structure and liquidity. This would ensure that PCHI is best equipped to continue to advance its transformational initiatives and enhance its market leadership in all things celebration from a strengthened financial position. To implement the company’s pre-negotiated restructuring, PCHI and certain of its domestic subsidiaries filed voluntary Chapter 11 petitions for relief in the U.S. Bankruptcy Court for the Southern District of Texas. The company’s subsidiaries outside of the U.S., its Party City franchise stores, and its Anagram business, which is the global market leader in foil balloons, are not part of the Chapter 11 proceedings and will continue as core components of the PCHI enterprise. PCHI has secured a commitment from the Ad Hoc Group for $150M in debtor-in-possession financing. Subject to Court approval, this "new money" financing will provide ample liquidity to support continued operations during the process across the company’s retail and consumer products divisions while maintaining momentum on its transformation. The company is filing with the Court a series of customary motions seeking to maintain business-as-usual operations and uphold its commitments to its valued stakeholders. These "first day" motions, which PCHI expects to be approved in short order, include requests to continue to pay wages and provide benefits to the company’s employees as usual as well as honor customer programs and policies. The company intends to pay suppliers in the ordinary course for authorized goods received and services provided after the filing. The restructuring is expected to be completed in the second quarter of 2023.