Tempur Sealy refinances with new $1.65 billion five-year facility

By William Gullotti

Buffalo, N.Y., Oct. 11 – Tempur Sealy International Inc., Tempur-Pedic Management, LLC and some wholly owned subsidiaries jointly closed a refinancing transaction on Oct. 10 in the form of a new $1.65 billion five-year senior secured credit agreement with Bank of America, NA as administrative agent, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

The new agreement, comprised of a $1.15 billion revolving facility and a $500 million term facility, refinances in full the company’s previous amended and restated agreement with JPMorgan Chase Bank, NA as administrative agent.

Included with the new agreement is an accordion feature that permits incremental borrowings of up to $850 million. Subject to compliance with a maximum consolidated secured leverage ratio test, and some other conditions, the accordion may be exercised without limit.

The facilities mature Oct. 10, 2028.

The revolver includes a $60 million subfacility for letters of credit. There is also a $50 million sublimit for swingline loans.

Borrowings from the multicurrency facility bear interest at SOFR, Sonia, Euribor, CDOR or Tibor plus a margin ranging from 112.5 basis points to 200 bps. There is also a commitment fee ranging from 15 bps to 35 bps. The margin and fee are determined by the company’s consolidated total leverage ratio.

Amounts under the revolver may be borrowed, repaid and reborrowed from time to time until the maturity date. The term facility is subject to quarterly amortization and mandatory prepayment in connection with certain debt issuances, asset sales and casualty events, subject to certain reinvestment rights. Voluntary prepayments and commitment reductions are permitted at any time without payment of any prepayment premiums.

The company is required to maintain a consolidated interest coverage ratio of no more than 3.0 to 1.0, a consolidated total leverage ratio less than 5.0 to 1.0 and a consolidated secured leverage ratio of less than 3.5 to 1.0.

The company used proceeds under both the revolver and the term facility to refinance outstanding borrowings under the previous facility and subsequently terminated it. Facility proceeds are intended for general corporate purposes.

BofA Securities Inc., JPMorgan, Wells Fargo Bank, NA and Sumitomo Mitsui Banking Corp. are the joint lead arrangers and joint bookrunners for the facility.

JPMorgan, Bank of America, Wells Fargo and Sumitomo are acting as co-syndication agents.

The senior co-documentation agents are Truist Bank, HSBC Bank USA, Bank of Nova Scotia, TD Bank, NA, Mizuho Bank, Ltd. and Fifth-Third Bank, NA.

Tempur Sealy is a Lexington, Ky.-based designer, manufacturer, distributor and retailer of bedding products.

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