Sally Beauty expected to price $300 million five-year second-lien notes on Tuesday

By Paul A. Harris

Portland, Ore., April 20 – Sally Beauty Holdings, Inc. expects to price a $300 million offering of five-year senior secured second-lien notes (BB-) on Tuesday, according to market sources.

The issuers will be Sally Holdings LLC and Sally Capital Inc.

Sally Beauty unsecured notes due 2025 were trading with a 9.35% yield on Monday morning, leading one bond trader to estimate that the new secured paper could come in the high 8% area.

The Rule 144A and Regulation S for life deal was set to be shopped on a late Monday morning conference call with investors.

BofA Securities Inc. is the left bookrunner. SunTrust Robinson Humphrey Inc. and J.P. Morgan Securities LLC are the joint bookrunners. UBS Securities LLC is the co-manager.

The notes come with two years of call protection.

The Denton, Tex.-based retailer and distributor of professional beauty supplies plans to use the proceeds for working capital and general corporate purposes.

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