Current and Long-Term Obligations | Note 13 – Current and Long-Term Obligations Long-term obligations at June 30, 2022, December 31, 2021 and June 30, 2021 consisted of the following: June 30, December 31, June 30, Principal Amount Gross Carrying Amount Deferred Financing Costs Net Carrying Amount Net Carrying Amount Net Carrying Amount 8.75 % Senior Secured First Lien Notes – due 2026 $ 750,000 $ 750,000 $ ( 15,312 ) $ 734,688 $ 732,957 $ 731,305 6.125 % Senior Notes – due 2023 22,924 22,924 ( 62 ) 22,862 22,834 22,806 6.625 % Senior Notes – due 2026 92,254 92,254 ( 591 ) 91,663 91,591 91,519 First Lien Party City Notes – due 2025 161,669 193,426 — 193,426 198,004 202,588 First Lien Anagram Notes – due 2025 118,699 149,385 ( 653 ) 148,732 149,569 150,451 Second Lien Anagram Notes – due 2026 93,613 144,576 — 144,576 144,619 148,114 Finance lease obligations 12,295 12,295 — 12,295 12,988 13,398 Total long-term obligations 1,251,454 1,364,860 ( 16,618 ) 1,348,242 1,352,562 1,360,181 Less: current portion ( 920 ) ( 920 ) — ( 920 ) ( 1,373 ) ( 1,265 ) Long-term obligations, excluding current portion $ 1,250,534 $ 1,363,940 $ ( 16,618 ) $ 1,347,322 $ 1,351,189 $ 1,358,916 Prior to April 2019, the Company had a $ 540,000 asset-based revolving credit facility (with a seasonal increase to $ 640,000 during a certain period of each calendar year) (the “ABL Facility”), which matures during August 2023 (subject to a springing maturity at an earlier date if the maturity date of certain of the Company’s other debt has not been extended or refinanced). It provides for (a) revolving loans, subject to a borrowing base, and (b) letters of credit, in an aggregate face amount at any time outstanding not to exceed $ 50,000 . During April 2019, the Company amended the ABL Facility. Such amendment removed the seasonal component and made the ABL Facility a $ 640,000 facility with no seasonal modification component. In connection with the refinancing, PCHI (1) reduced the ABL revolving commitments and prepaid the outstanding ABL revolving loans, in each case, in an aggregate principal amount equal to $ 44,000 in accordance with the ABL Facility credit agreement, and (2) designated Anagram Holdings, LLC (“Anagram”) and each of its subsidiaries as an unrestricted subsidiary under the ABL Facility. Additionally, in February 2021 in conjunction with the transaction discussed below, the Company amended the ABL Facility by reducing the commitments to $ 475,000 and extending the maturity to February 2026 , or earlier as provided for in the agreement. On March 18, 2022, the ABL Facility was further amended. The amendment modified certain eligibility criteria with respect to the inventory component of the borrowing base. The changes lengthen the permitted in-transit time for eligible in-transit inventory being shipped from a location outside of the United States, subject to a cap on the aggregate amount of foreign in-transit inventory that is eligible to be reflected in the borrowing base. PCHI had approximately $ 142.3 million, $ 192.4 million and $ 170.2 million of availability under the ABL Facility as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively. As discussed further below, Anagram had a separate asset-based revolving credit facility and there was approximately $ 14.4 million of availability under the Anagram ABL Facility as of June 30, 2022. On July 19, 2022, the ABL Facility was amended. Pursuant to the amendment, the aggregate commitments under the ABL Facility were increased from $ 475,000 to $ 562,110.5 . The increase includes the establishment of a new $ 17,110.5 asset-based first-in, last-out revolving tranche (the “FILO Facility”). Commencing in March 2023, the borrowers will be required to make scheduled quarterly payments of the loans under the FILO Facility equal to 5.55 % of the original principal amount of the FILO Facility as in effect on the date of the ABL amendment (with a corresponding reduction to the aggregate commitments under the FILO Facility). The balance of the FILO Facility has the same final stated maturity date as the other loans under the ABL Facility, which is scheduled to occur in February 2026 (subject to a springing maturity at an earlier date, under certain circumstances, if the maturity date of certain other debt of PCHI has not been extended or refinanced). The ABL amendment replaced the London Interbank Offered Rate (“LIBOR”) as the interest rate benchmark under the ABL Credit Agreement with the forward-looking term rate based on the Secured Overnight Financing Rate, subject to a 0.10 % credit spread adjustment (“Adjusted Term SOFR”). Pursuant to the ABL amendment, outstanding loans under the ABL Credit Agreement bear interest at a rate per annum equal to the applicable margin plus, at the borrowers’ option, either (a) an alternate base rate (“ABR”), which is the highest of (i) the Administrative Agent’s prime rate, (ii) the federal funds effective rate plus 0.50 %, and (iii) Adjusted Term SOFR for a one-month tenor plus 1.00 %, or (b) Adjusted Term SOFR for the applicable interest period. Other than with respect to borrowings under the FILO Facility, the rates for the applicable margin for borrowings under the ABL Facility remain unchanged, ranging from 0.50 % to 0.75 % with respect to ABR borrowings and from 1.50 % to 1.75 % with respect to Adjusted Term SOFR borrowings. The applicable margin for borrowings under the FILO Facility is 1.75 % with respect to ABR borrowings and 2.75 % with respect to Adjusted Term SOFR borrowings. The ABL Amendment also modified certain other provisions of the ABL Credit Agreement, including, among other things, to make certain changes to the excess availability trigger for the springing fixed charge coverage ratio covenant in connection with the commitment increase under the ABL Facility. Pursuant to the ABL Amendment, PCHI must comply with such financial covenant if excess availability under the ABL Facility on any day is less than the greater of: (a) $ 46,000,000 (increased from $ 40,000,000 ) and (b) 10 % of the Total Line Cap (as defined therein). February 2021 Debt Transaction During February 2021, PCHI issued $ 750,000 of senior secured first lien notes at an interest rate of 8.750 % (“8.750% Senior Notes”). The 8.750 % Senior Notes will mature in February 2026 . The Company used the proceeds from the 8.750% Senior Notes to prepay the outstanding balance of $ 694,220 under its existing Term Loan Credit Agreement. The prepayment of the Term Loan Credit Agreement was in accordance with the terms of such agreement. In connection with the transaction, the Company wrote-off a portion of the existing capitalized deferred financing costs and original issuance discounts. Additionally, the Company incurred $ 18,976 of third-party fees, principally banker fees. The amounts expensed were recorded in Other expense, net in the Company’s Consolidated Statement of Operations and Comprehensive (Loss) Income and included in Gain on debt repayment in the Company’s Consolidated Statement of Cash Flows. In conjunction with the amendment of the ABL Facility, the Company wrote-off a portion of existing deferred financing costs. Such amount was recorded in Other expense, net in the Company’s Consolidated Statement of Operations and Comprehensive (Loss) Income and included in Gain on debt repayment in the Company’s Consolidated Statement of Cash Flows. The remaining capitalized costs, and $ 2,400 of new third-party costs incurred in conjunction with the amendment, will be amortized over the revised term of the ABL Facility. Interest on the 8.750% Senior Notes is payable semi-annually in arrears on February 15th and August 15th of each year. The 8.750% Senior Notes are guaranteed, jointly and severally, on a senior secured basis by each of PCHI’s existing and future domestic subsidiaries. The 8.750% Senior Notes and related guarantees are secured by a first priority lien on substantially all assets of PCHI and the guarantors, except for the collateral that secures the senior credit facilities on a first lien basis, with respect to which the 8.750% Senior Notes and related guarantees will be secured by a second priority lien, in each case subject to permitted liens and certain exclusions and release provisions. The indenture governing the 8.750% Senior Notes contains covenants that, among other things, limit the PCHI’s ability and the ability of its restricted subsidiaries to: • incur additional indebtedness or issue certain disqualified stock or preferred stock; • create liens; • pay dividends or distributions, redeem or repurchase equity; • prepay junior lien indebtedness, unsecured pari passu indebtedness or subordinated indebtedness or make certain investments; • transfer or sell assets; • engage in consolidation, amalgamation or merger, or sell, transfer or otherwise dispose of all or substantially all of their assets; and • enter into certain transactions with affiliates. The indenture governing the notes also contains certain customary affirmative covenants and events of default. On or after August 15, 2023, 2024, and 2025, respectively, PCHI may redeem some or all of the 8.750% Senior Notes at the redemption price of 104.375 %, 102.188 % and 100.000 %, respectively, plus accrued and unpaid interest, if any. In addition, PCHI may redeem up to 40 % of the aggregate principal amount outstanding on or before August 15, 2023 with the cash proceeds from certain equity offerings at a redemption price of 108.750 % of the principal amount, plus accrued and unpaid interest. PCHI may also redeem some or all of the notes before August 15, 2023 at a redemption price of 100 % of the principal amount plus a premium that is defined in the indenture. At any time prior to August 15, 2023, PCHI may also at its option redeem during each 12-month period commencing with the issue date up to 10 % of the aggregate principal amount of the 8.750% Senior Notes at a redemption price of 103 % of the aggregate principal amount, plus accrued and unpaid interest, if any. Also, if PCHI experiences certain types of change in control, as defined, it may be required to offer to repurchase the 8.750% Senior Notes at 101 % of their principal amount. On May 7, 2021, Anagram, a wholly owned subsidiary of the Company, entered into a $ 15 million asset-based revolving credit facility (“Anagram ABL Facility”), which matures during May 2024 . It provides for (a) revolving loans, subject to a borrowing base described below, and (b) under the Anagram ABL Facility, Borrowers would be entitled to request letters of credit (“Letters of Credit”). The aggregate amount of outstanding Letters of Credit would be reserved against the credit availability and subject to a $ 3 million cap. Under the Anagram ABL Facility, the borrowing base at any time equals (a) a percentage of eligible trade receivables, plus (b) a percentage of eligible inventory, plus (c) a percentage of eligible credit card receivables, less (d) certain reserves. The Anagram ABL Facility generally provides for the following pricing options: All revolving loans will bear interest, at the Anagram's election, at a per annum rate equal to either (a) a base rate, which represents for any day a rate equal to the greater of (i) the prime rate on such day subject to a 0 % floor, (ii) the federal funds rate plus 5.0 % and (iii) one-half of one percent per annum, in each case, plus a margin of 1.5 % or (b) the Daily One Month LIBOR subject to a 0.5 % floor, plus a margin of 2.5 % . In addition to paying interest on outstanding principal, Anagram is required to pay a commitment fee of 0.5 % to 1 % per annum in respect of unutilized commitments. Anagram must also pay customary letter of credit fees. All obligations under the Anagram ABL Facility are jointly and severally guaranteed by Anagram and its subsidiaries. The Anagram ABL facility contains covenants and events of default customary for such credit facilities. |