Mattress Firm – Receives Interim Approval for DIP Financing of $250 million, Consisting of a $150 million ABL Facility and a $100 million Term Loan

October 9, 2018 – The Court hearing the Mattress Firm case approved on an interim basis the Debtors’ debtor-in-possession (“DIP”) financing [Docket No. 184] in respect of which Barclays Bank PLC is to serve as administrative agent and co-collateral agent (the “ABL DIP Agents”) and Citizens Bank is to serve as a co-collateral agent. The Court scheduled a final hearing on October 29, 2018, with objections to be filed by October 24, 2018. 

As previously reported [Docket No. 16], “The Debtors were able to obtain two post-petition financing facilities in an aggregate principal amount of $250 million, consisting of a $150 million ABL DIP Facility and a $100 million Term Loan DIP….The ‘ABL DIP Facility’ consists of up to $150 million in revolving credit commitments (the commitments thereunder the ‘Revolving DIP Commitments’ and the loans thereunder the ‘Revolving DIP Loans’), which shall include (a) a roll up of all outstanding Prepetition ABL Credit Agreement Indebtedness upon entry of the Interim Order, (b) a $15 million swing line sub-facility, and (c) an amount equal to $30 million of the Revolving DIP Commitments available in the form of standby letters of credit, inclusive of all outstanding letters of credit existing under the Prepetition ABL Credit Agreement converting to letters of credit under the ABL DIP Facility….Also authorizing the Debtors to obtain a second priority senior secured term loan debtor in possession credit facility (the ‘Term Loan DIP Facility’ together with the ABL DIP Facility, the ‘DIP Facilities’) consisting of up to $100 million in term loan credit commitments (the commitments thereunder the ‘Term Loan DIP Commitments’ together with the ABL DIP Commitments, the ‘DIP Commitments’ and the loans thereunder the ‘Term DIP Loans’ together with the ABL DIP Loans, the ‘DIP Loans’)….The aggregate amount of the Revolving Credit Commitment on and after the Closing Date is $150,000,000.”

The Court also approved the motion to file under seal that certain DIP Financing Fee Letter (the “Fee Letter”) related to the Debtors’ Postpetition Secured D.I.P. Financing [Docket No. 180]. As previously reported [Docket No. 19], “Specifically, the descriptions of fees set forth in the Fee Letter constitute proprietary information not typically disclosed to the public or to competing financial institutions. In light of the highly competitive nature of the investment banking and finance lending industries, it is of critical importance to the DIP Agents that the details of the fee structure set forth in the Fee Letter be kept confidential so that its competitors may not use the information contained therein to gain a strategic advantage over the lenders in the marketplace….The Debtors submit that such disclosure will provide sufficient safeguards to ensure that the relief requested in this Motion will not adversely affect the interests of any parties in interest to these chapter 11 cases.”