Moody's rates Sally Holdings senior notes B1

Moody's Investors Service said it assigned a B1 rating to Sally Holdings LLC's proposed $450 million senior unsecured note offering to be issued under Rule 144A.

The assigned rating is subject to the receipt and review of final documentation and closing of a proposed refinancing transaction.

Concurrently, Moody's upgraded Sally's existing ratings, including its corporate family rating to Ba3 from B1, and affirmed the company's SGL-1 speculative grade liquidity rating.

The outlook is stable.

Moody's said the company continues to apply free cash flow toward debt reduction while also investing in growth, both through new store openings and tuck-in acquisitions.

Profitability continues to improve due to an increased mix of exclusive label products, customer mix shift toward higher margin retail customers, as well as sourcing and other cost cutting initiatives, the agency said.

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