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Mattress Firm completes $550M term loan for refinancing wide of talk; terms

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Mattress Firm completes $550M term loan for refinancing wide of talk; terms

Investors have received allocations of a $550 million term loan B due 2027 for Mattress Firm Inc. that priced wide of talk at L+525 with a 1% Libor floor and an original issue discount of 97.5 via a J.P. Morgan-led arranger group, according to sources. The loan broke for trading at 99/100. In other changes, the amortization was increased to 10%, from 5%, and the call structure was revised to 102/101 hard calls from 12 months of 101 soft call. Proceeds will be used to refinance the company’s $465 million exit term loan due November 2022 and $192 million HoldCo PIK loan due November 2023, according to S&P Global Ratings. The company is also extending the maturity of its $125 million ABL revolver by five years to November 2025. Mattress Firm operates as a specialty retailer of mattresses. Terms:

Borrower Mattress Firm
Issue $550 million term loan B
UoP Refinancing
Spread L+525
LIBOR floor 1.00%
Price 97.5
Tenor 7-year
YTM 7.09%
Four-year yield 7.17%
Call protection 102, 101 hard calls
Corporate ratings B+/B2
Facility ratings B+/B1
Recovery ratings 3
Financial covenants None
Arrangers JPM/Barc/Truist
Admin agent JPM
Px Talk L+475-500/1%/98
Sponsor Private
Notes Amortizes at 10% per annum. Call structure revised from 12-month soft call.