By Paul A. Harris
Portland, Ore., July 19 – Coty Inc. priced an upsized $750 million issue of seven-year senior secured notes (Ba2/BB) at par to yield 6 5/8% in a Wednesday drive-by, according to market sources.
The yield printed at the tight end of yield talk in the 6¾% area. Initial talk was in the 7% area.
The deal was a blowout, according to a sellside source, who added that the bonds, which rode into the market on $200 million of reverse inquiry, played to $2.8 billion of demand.
The new bonds were going out at par ¼ bid late Wednesday afternoon, the source added.
J.P. Morgan Securities LLC was at the left of a syndicate of joint bookrunners that also included Citigroup Global Markets Inc., BofA Securities Inc., TD Securities (USA) LLC, SMBC Nikko Securities America Inc., Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., Credit Agricole CIB, ING Financial Markets LLC, MUFG Securities Americas Inc. and Santander US Capital Markets LLC.
Along with Coty, the issuing entities are HFC Prestige Products, Inc. and HFC Prestige International U.S. LLC, subsidiaries of the New York-based beauty company, which intends to use the proceeds to repay debt under the dollar-denominated loans outstanding under Coty’s senior secured term loan B credit facility due April 2025.
| Issuers: | Coty Inc., HFC Prestige Products, Inc. and HFC Prestige International U.S. LLC
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| Amount: | $750 million, increased from $600 million
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| Issue: | Senior secured notes
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| Maturity: | July 15, 2030
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| Bookrunners: | J.P. Morgan Securities LLC, Citigroup Global Markets Inc., BofA Securities Inc., TD Securities (USA) LLC, SMBC Nikko Securities America Inc., Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., Credit Agricole CIB, ING Financial Markets LLC, MUFG Securities Americas Inc. and Santander US Capital Markets LLC
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| Coupon: | 6 5/8%
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| Price: | Par
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| Yield: | 6 5/8%
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| Spread: | 277 bps
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| First call: | July 15, 2026 at 103.313
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| Trade date: | July 19
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| Settlement date: | July 26
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| Ratings: | Moody’s: Ba2
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| S&P: BB
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| Distribution: | Rule 144A and Regulation S
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| Price talk: | 6¾% area
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| Marketing: | Drive-by
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