Serta Simmons receives final approval of $125 million DIP facility

By Sarah Lizee

Olympia, Wash., March 2 – Serta Simmons Bedding, LLC received final approval of a $125 million asset-based lending debtor-in-possession facility, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The DIP facility is being provided by Eclipse Business Capital LLC, a lender outside of the debtors’ existing capital structure, as previously reported.

Interest on the DIP facility is SOFR plus 450 basis points. There is a 0.5% commitment fee and a $2.25 million closing fee. There is also a $1.56 million exit fee, provided that the fee will be reduced to $1.06 million if the fee becomes due and payable on the same day that any exit financing is provided or arranged by Eclipse on the effective date.

The DIP facility is set to mature in six months from closing, or earlier in some cases, including if a plan or sale is consummated before then.

There are some case milestones under the DIP facility, including confirming a plan no later than 30 days before the maturity date, and the plan going into effect by the maturity date.

At emergence, the DIP facility will convert to or be replaced by a $125 million exit ABL facility via Eclipse.

Serta, an Advent International portfolio company, is an Atlanta-based manufacturer and distributor of mattresses. It filed bankruptcy on Jan. 23 under Chapter 11 case number 23-90020.

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