Party City (PRTY) Senior Notes Upgraded to Buy at Citi

Citi Fixed Income upgraded Party City (NYSE: PRTY) Senior Notes to Buy and to Overweight from Marketweight the issuer.

Analyst Jenna Giannelli sees PRTY different than other retailers as it has delivered moderate, sustainable sales and EBITDA growth in every year since 2009.

The 6.125% senior notes due 2023 have sold off over 3pts in the past three weeks and now yield 6.1%. They think they should trade inside the B1/B Petco TL, and highlight the PRTY notes have historically traded 80-100bp wide to its TL but currently are 200bp wide.

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