American Reprographics Company (ARC) registers its notes and offers exchange; new registered notes for originally issued non-registered notes

ARC files Form S-4 Registration Statement with the SEC to “register” its debt.

I’m going to make just a few comments about ARC’s “exchange offer”, but please note that, in order to get all the facts straight, you must rely only on the information contained in the registration statement / prospectus (the S-4 filing with the SEC).

On December 1, 2010, ARC refinanced most of its debt by issuing $200 million in “senior” unsecured “notes”. Those notes were not “registered” and, thusly, holders of those notes were “qualified” institutional investors. In conjunction with the sale of those notes, ARC agreed to later “register” new, replacement “notes” and, at the time that that’s done, to offer an “exchange” – offer new registered notes in exchange for the original unregistered notes.

So, the S-4 filling is kind of a non-event, with the exception that, after the exchange is completed, it sounds like there will be a “market” for ARC’s notes; meaning that you and I can, if we can find someone to sell them to us, purchase ARC’s notes and collect 10.5% interest. Interest will be paid semi-annually. The notes are due in 2016, but ARC has some sort of early-retirement (call) option exercisable in 2013.

Hey, 10.5% interest ain’t bad, especially if you believe in the company’s ability to continue to weather the storm and in the ability of ARC management to manage the company’s cash flow conservatively and wisely.

I encourage reprographers to read the entire registration statement, since it contains a lot of interesting (and, in some cases, updated) information about ARC’s business. One of the most interesting sections in the S-4 is the section that outlines “risk factors.” That section, by comparison, is huge. As to the “industry-specific” risk factors, see how many you agree with and how many you don’t agree with and, after you’ve read the risk factors section, are there, in your opinion, any risk factors missing?

What appears below in blue type is part of the text from Page 5 of the S-4 filing:

American Reprographics Company

Offer to Exchange

$200,000,000 10.5% Senior Notes due 2016

for

$200,000,000 10.5% Senior Notes due 2016

that have been Registered Under the Securities Act of 1933

We are offering, upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal, to exchange an aggregate principal amount of up to $200,000,000 of our new 10.5% Senior Notes due 2016, which we refer to as the exchange notes, for all of our outstanding unregistered 10.5% Senior Notes due 2016, which we refer to as the initial notes, in a transaction registered under the Securities Act of 1933, as amended, or the Securities Act. We collectively refer to the initial notes and the exchange notes as the notes. We refer to the offer described in this prospectus to exchange the initial notes for the exchange notes as the exchange offer.

The notes are unconditionally guaranteed by our existing and future subsidiaries that guarantee our other existing senior notes, revolving credit facility or any other indebtedness of ours or of the subsidiary guarantors, which we refer to as the subsidiary guarantors. The guarantees of the notes are unsecured senior obligations of the subsidiary guarantors and rank equally with existing and future unsecured senior debt of the subsidiary guarantors and senior to existing and future subordinated debt of the subsidiary guarantors. The guarantees are effectively subordinated to existing and future secured debt of the subsidiary guarantors and structurally subordinated to existing and future debt of our non-guarantor subsidiaries.

Terms of the exchange offer:

* We will exchange all initial notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer.

* You may withdraw tenders of initial notes at any time prior to the expiration of the exchange offer.

* We believe that the exchange of initial notes for exchange notes will not be a taxable event for U.S. federal income tax purposes.

* The form and terms of the exchange notes are identical in all material respects to the form and terms of the initial notes.

You can access the complete document (the S-4 Registration Statement) at this link:

http://tinyurl.com/3du6aqu