Simmons Bedding 7 7/8% noteholders agree to default forbearance

By Caroline Salls

Pittsburgh, Feb. 5 - Simmons Bedding Co., a subsidiary of Simmons Co., and a committee representing holders of 60% of the company's outstanding $200 million 7 7/8% senior subordinated notes due 2014 have reached a forbearance agreement, according to an 8-K filed Thursday with the Securities and Exchange Commission.

Under the agreement, the noteholders have agreed not to exercise default-related rights through March 31.

The forbearance agreement is subject to approval by 75% of the noteholders.

Simmons Bedding said it is seeking the forbearance period to give it time to explore an organized financial restructuring, which would significantly reduce the leverage on its balance sheet.

"We appreciate the confidence that the ad hoc committee for the notes has shown by approving the forbearance agreement and we look forward to finalizing the restructuring in a timely manner," Simmons Bedding president and chief operating officer Stephen G. Fendrich said in a company news release.

"Simmons continues to make progress working with its various financial stakeholders to design and implement a balance sheet restructuring."

As previously reported, Simmons did not make the $7.9 million interest payment due Jan. 15 on the 7 7/8% notes.

Simmons is an Atlanta-based manufacturer of bedding products.

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