Casper Sleep enters $100 million asset-based revolver, FILO facilities

By Marisa Wong

Los Angeles, Jan. 25 – Casper Sleep Inc. entered into a credit agreement on Jan. 25 for a senior secured asset-based revolving facility totaling $65 million, a senior secured term credit facility of $20 million (series A FILO facility) and a senior secured term credit facility of $15 million (series B FILO facility), according to an 8-K filing with the Securities and Exchange Commission.

KKR Loan Administration Services LLC is administrative agent and collateral agent with Callodine Commercial Finance, LLC as FILO agent.

Some of Casper’s wholly owned subsidiaries are guarantors.

Proceeds were used to fund working capital needs and for general corporate purposes, pay the costs related to the acquisition of Casper by Durational Capital Management, LP, repay all of Casper’s total outstanding debt and pay some transaction fees and expenses associated with the acquisition and the credit agreement.

The series B FILO facility must be repaid in an amount equal to $3.75 million on Nov. 1, 2022; and in quarterly installments, each of $1.25 million, beginning on Feb. 1, 2023 and continuing on the first day of each calendar quarter after that, subject to liquidity conditions being met.

Neither the ABL facility nor the series A FILO facility have any amortization.

The ABL revolver and the FILO loans mature 2.5 years from the closing date.

The maturity date of the ABL facility and of the FILO facilities will spring to 3.5 years after the closing date to the extent free cash flow after the closing date is positive for any consecutive eight-month period.

Borrowings under the ABL facility bear interest at SOFR plus an applicable margin. All borrowings under the FILO facilities bear interest at a FILO rate plus an applicable margin. The spreads were not specified in the 8-K.

The credit agreement includes a number of negative covenants and also provisions requiring mandatory prepayments as follows: whenever the outstanding amounts under the ABL facility exceed the tranche A loan cap; upon occurrence of specified events of defaults, failure by the borrowers to maintain a certain level of liquidity or 90 days before the maturity date of the ABL facility or the FILO facilities; 100% of the net cash proceeds from permitted sales or issuances of equity interest or from capital contributions; and 100% of the net cash proceeds from any debt not permitted to be incurred or issued under the credit agreement.

At the closing of the merger, Casper repaid in full all amounts outstanding under its credit agreement dated Nov. 10, 2020 with Wells Fargo Bank, NA as agent. The company paid an aggregate of about $15.7 million to repay all amounts due with respect to termination of the Wells Fargo credit agreement.

Casper also repaid in full all debt outstanding under its growth capital loan and security agreement dated March 1, 2019 with Triplepoint Venture Growth BDC Corp. as collateral agent and lender and Triplepoint Capital LLC as lender and terminated the credit agreement. The company paid about $70.84 million to repay all amounts due.

Casper is a New York-based e-commerce company that sells sleep products.

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