Moody’s rates Mattress Firm loam B1

Moody's Investors Service said it assigned a B1 rating to the proposed senior secured term loan of Mattress Holding Corp., a subsidiary of Mattress Firm Holding Corp. and parent company of the primary operating entity, Mattress Firm, Inc.

Mattress Firm's B2 corporate family rating and B2-PD probability of default ratings were confirmed, as was the SGL-2 speculative grade liquidity rating.

The outlook is stable.

Proceeds from the new $720 million seven-year term loan, along with excess cash, modest borrowings under the new $125 million five-year ABL revolving credit facility (unrated by Moody's) and roughly $40 million of common stock issuance, will be used to acquire Sleep Train, Inc. and Back to Bed. In addition, the company intends to repay its existing debt of about $297 million and pay fees and expenses.

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