Mattress Firm – Seeks Approval for DIP Financing of $250 million, Consisting of a $150 million ABL Facility and a $100 million Term Loan, and Related Seal on Fee Letters

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October 5, 2018 – Mattress Firm requested Court approval for postpetition, debtor-in-possession (“DIP”) financing [Docket No. 16] 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 DIP financing motion explains, “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 DIP Loans will accrue interest, at a percentage per annum equal to (i) 2.75% for Eurocurrency Rate Loans and (ii) 1.75% for Base Rate Loans. 

The Debtors also filed with the Court a motion to file under seal  a fee letter related to the DIP Financing  (the “Fee Letter”) [Docket No. 19], which notes, “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.”

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