Coty increases term loan A and euro term loan B tranche sizes

By Sara Rosenberg

New York, Oct. 13 – Coty Inc./Galleria Co. upsized the term loan A at Coty to $1.75 billion from $1.5 billion and the euro term loan B at Coty to $750 million-equivalent from $500 million-equivalent, according to a market source.

Additionally, pricing on the euro term loan B was reduced to Euribor plus 275 basis points from Euribor plus 300 bps, the source said.

The euro term loan B still has a 0.75% floor and an original issue discount of 99.5.

The U.S. term loan B at Coty was unchanged at $500 million at Libor plus 300 bps with a 0.75% Libor floor and an original issue discount of 99.5.

Also unchanged was the term loan B at Galleria at $1 billion at Libor plus 300 bps with a 0.75% Libor floor and an original issue discount of 99.5. This tranche still has a ticking fee of half the spread from days 31-60 and the full spread thereafter.

As before, the Coty term loan B debt has 101 soft call protection for six months, and the Galleria term loan B has no call protection.

Pricing on Coty’s upsized term loan A, as well as on its $1.5 billion revolver, and on Galleria’s $2 billion term loan A and $1.5 billion revolver is Libor plus 150 bps.

Other changes made to the deal included removing the MFN sunset from the term loan B’s and eliminating the leverage-based pricing step-down from the term loan B’s, the source continued.

Recommitments are due at noon ET on Thursday, with allocations expected thereafter.

J.P. Morgan Securities LLC is left lead on Coty/Galleria’s now $9 billion credit facility (Ba1/BBB-), up from $8.5 billion.

Proceeds will be used to help fund the merger of Coty with Procter & Gamble Co.’s fine fragrance, color cosmetics and hair color businesses.

The transaction values the P&G business at about $12.5 billion, including the assumption of debt.

The funds from the upsizing will be used for additional cash on Coty’s balance sheet, the source added.

Coty is a New York-based fragrance manufacturer.

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