New Issue: Sally Beauty sells upsized $750 million eight-year notes at par to yield 6 7/8%

By Paul A. Harris

Portland, Ore., Nov. 3 - Sally Holdings LLC and Sally Capital Inc. priced a massively upsized $750 million issue of eight-year senior notes (B1/BB+/) at par to yield 6 7/8% on Thursday, according to an informed source.

The deal was upsized from $450 million.

The yield printed at the tight end of price talk, which had been set in the 7% area.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the joint bookrunners for the quick-to-market deal.

Proceeds will be used to redeem the company's 9¼% senior notes due 2014. The proceeds from the upsizing will be used to redeem the 10½% senior subordinated notes due 2016.

The issuing entities are subsidiaries of Sally Beauty Holdings, Inc., a Denton, Texas-based retailer and distributor of professional beauty supplies.

Issuer:	Sally Holdings LLC and Sally Capital Inc.
Amount:	$750 million, increased from $450 million
Maturity:	Nov. 15, 2019
Securities:	Senior notes
Bookrunners:	Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC, Wells Fargo Securities LLC
Coupon:	6 7/8%
Price:	Par
Yield:	6 7/8%
Spread:	519 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Nov. 15, 2015, then callable at 103.438, 101.719, par on and after Nov. 15, 2017
Equity clawback:	35% at 106.875 until Nov. 15, 2014
Trade date:	Nov. 3
Settlement date:	Nov. 8
Ratings:	Moody's: B1
	Standard & Poor's: BB+
Distribution:	Rule 144A and Regulation S with registration rights
Price talk:	7% area
Marketing:	Quick to market

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