Sally tightens talk on loans, shifts funds to fixed-rate tranche

By Paul A. Harris

Portland, Ore., June 23 – Sally Beauty Holdings Inc. tightened pricing for its $850 million of seven-year term loan B debt and shifted $50 million to the fixed-rate tranche from the floating-rate tranche, according to a market source.

A downsized $550 million floating-rate tranche is talked at Libor plus 250 basis points, tightened from 275 to 300 bps.

The reoffer price of the floating-rate tranche, which is downsized from $600 million, is 99.5, narrowed from earlier discount talk of 99.

Unchanged are the 0% Libor floor and the six months of soft call protection at 101.

An upsized $300 million fixed-rate tranche is talked at 4½%, tightened from initial talk of 4¾% to 5%.

The fixed-rate tranche is also offered at 99.5, contracting the discount from earlier talk of 99.

The fixed rate tranche becomes callable at 102 in year two and 101 in year three.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds from the term loan B will be used to fund the redemption of $850 million of 5¾% senior notes due 2022.

The company also intends to amend and restate its ABL revolving credit facility to extend the maturity by five years and reduce the applicable margins.

Sally Beauty is a Denton, Texas-based specialty retailer and distributor of professional beauty supplies.

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