Simmons Bedding seeks waiver of leverage ratio covenant

By Angela McDaniels

Tacoma, Wash., Oct. 21 - Simmons Co. said its subsidiary, Simmons Bedding Co., does not expect to meet the maximum leverage ratio covenant of its senior credit facility as of Sept. 27.

Simmons Bedding has notified its lenders and is seeking their consent to amend the facility to, among other things, waive the covenant breach and amend some future maximum leverage ratio and minimum cash interest coverage ratio covenants to provide more financial flexibility.

The facility includes a $75 million revolving loan facility and a $465 million tranche D term loan, according to a company news release. The revolver is fully drawn.

The company reported that is expects its net sales for the third quarter to be down 10% to 13% compared to the third quarter of 2007. It also expects its adjusted EBITDA to be $31 million to $34 million, and its debt to be $984 million as of Sept. 27. Cash on hand is estimated to be $62 million to $64 million.

Simmons is the Atlanta-based holding company for Simmons Bedding, which manufactures premium-branded bedding products.

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