Hot Topic sets Monday investor call for $350 million eight-year notes

By Paul A. Harris

Portland, Ore., May 31 - Hot Topic, Inc. plans to hold a Monday investor call to discuss its $350 million offering of eight-year senior secured notes, according to an informed source.

The deal is set to price late in the June 3 week.

BofA Merrill Lynch and Jefferies LLC are the joint bookrunners.

The Rule 144A for life notes become callable in three years at par plus 75% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

The notes also feature a three-year 40% equity clawback and a 101% poison put.

Credit ratings in the single-B range are expected.

Proceeds, together with cash on hand and an equity contribution, will be used to fund the proposed acquisition of Hot Topic by affiliates of Sycamore Partners Management LLC.

Hot Topic is a City of Industry, Calif.-based specialty retailer of pop culture-influenced licensed apparel.

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