Anastasia Beverly Hills, advised by Ropes & Gray and Lazard, has created two unrestricted subsidiary entities to which it has assigned the IP rights of its brand — its most valuable asset — among other assets, according to sources.

The move, announced unceremoniously to lenders in a 25 April memo entitled “IP Dropdown”, according to sources, is an aggressive approach to negotiations with lenders who have long been part of a co-op group represented by Milbank.

At the same time as this inflammatory missive to lenders was being planned, Anastasia Soare, the eponymous founder of the brow, lipstick, and other makeup products, embarked upon on a marketing blitz for her memoir entitled “Raising Brows: My Story of Building a Billion Dollar Beauty Empire”, with plans to release the book in October — two months after the term loan maturities.

Private equity sponsor TPG, a minority holder, is being represented by Davis Polk, according to a source. TPG, whose preferred shares allowed them to request to be bought out if the company hadn’t sold or IPO’d by 2024, submitted a notice to redeem its preferred equity interests, which, if not completed, would allow TPG to initiate a sale of the company or an IPO. According to S&P, TPG’s $600m initial investment has accrued dividends and would now amount to $893m — but it still sits behind lenders, and the value of the company is likely insufficient to fully pay TPG out.

With an impending 10 August maturity of its $613m term loan and a revolver that expires next week, the move is headscratching. It effectively moved the economic value of the assets by assigning the rights to the unsub without the assets leaving the restricted box yet, which is not prohibited under its credit documents. Yet if it’s going to be used to dividend up to the owner, that represents fraudulent conveyance risk, and raising senior debt at an unsub is meaningless since lenders are not going to accept less than a par paydown three months from maturity, according to sources.

TPG and CPPIB combined to invest $700m in June 2018 for their initial investment, but the company has faced pressure from competition, limited scale and customer concentration.

Ropes, Lazard, Anastasia, Davis Polk, CPPIB and Milbank have not responded to requests for comment by press time. TPG declined to comment.