Coty brings $600 million seven-year secured notes; deal could upsize; initial talk 7% area

By Paul A. Harris

Portland, Ore., July 19 – Coty Inc. is expected to price a $600 million offering of seven-year senior secured notes (Ba2/BB) in a Wednesday drive-by, according to market sources.

Initial guidance has the deal coming to yield in the 7% area, according to a sellside source, who added that there is $200 million of reverse inquiry in the offering, which could upsize to $750 million.

The Rule 144A and Regulation S notes come with three years of call protection.

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 are the joint bookrunners.

The issuing entities will include 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 a portion of the dollar-denominated loans outstanding under Coty’s senior secured term loan B credit facility due April 2025.

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