New Issue: Sally Beauty sells $150 million tap of 5¾% notes due 2022 at 106.25 to yield 4.772%

By Paul A. Harris

Portland, Ore., Sept. 5 - Sally Holdings LLC and Sally Capital Inc. priced a $150 million-add-on to their 5¾% senior notes due June 1, 2022 (existing ratings Ba3/BB+) at 106.25 on Wednesday, according to an informed source.

The reoffer price, which came at the rich end of the 106 to 106.25 price talk, rendered a 4.772% yield to worst and a 4.932% yield to maturity.

Bank of America Merrill Lynch was the bookrunner for the quick-to-market deal.

The Denton, Texas-based specialty retailer plans to use the proceeds for general corporate purposes, which may include funding acquisitions, share repurchases or debt repayment.

The original $700 million issue priced at par on May 15, 2012.

Issuers:	Sally Holdings LLC and Sally Capital Inc.
Face amount:	$150 million
Proceeds:	$159,375,000
Maturity:	June 1, 2022
Security description:	Add-on to 5¾% senior notes due June 1, 2022
Bookrunner:	Bank of America Merrill Lynch
Coupon:	5¾%
Price:	106.25
Yield to worst:	4.772%
Yield to maturity:	4.932%
Call features:	Make-whole call at Treasuries plus 50 bps until June 1, 2017, then callable at 102.875, 101.917, 100.958, par on and after June 1, 2020
Equity clawback:	35% at 105.75 until June 1, 2015
Trade date:	Sept. 5
Settlement date:	Sept. 10 with accrued interest
Existing ratings:	Moody's: Ba3
	Standard & Poor's: BB+
Distribution:	SEC registered
Price talk:	106 to 106.25
Marketing:	Quick to market
Original issue:	$700 million issue priced at par on May 15, 2012
Total issue size:	$850 million
Fungibility:	New notes immediately fungible with existing notes

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