UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 10, 2023
TEMPUR SEALY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter) | | | | | | | | |
| Delaware | 001-31922 | 33-1022198 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| | |
1000 Tempur Way
Lexington, Kentucky 40511
(Address of principal executive offices) (Zip Code)
(800) 878-8889
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
| Common Stock, $0.01 par value | TPX | New York Stock Exchange |
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On October 10, 2023, Tempur Sealy International, Inc. (the "Company"), Tempur-Pedic Management, LLC (the "Additional Borrower") and certain wholly-owned subsidiaries of the Company (the "Subsidiary Guarantors") entered into a senior secured credit agreement (the "Credit Agreement") with the several banks and other financial institutions party thereto and Bank of America, N.A., as administrative agent (the "Agent"). The Credit Agreement refinances in full the Company’s existing credit facilities, which were governed by that certain Amended and Restated Credit Agreement, dated as of October 16, 2019, by and among the Company, the Additional Borrower and Subsidiary Guarantors, the several banks and other financial institutions party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (the "Existing Credit Agreement").
The Credit Agreement provides for a $1.15 billion revolving credit facility (the "Revolving Credit Facility"), a $500 million term loan facility (the "Term Loan Facility") and an incremental facility that permits incremental borrowings in an aggregate amount of up to $850 million and additional amounts subject to the conditions set forth therein, plus the amount of certain prepayments, plus an additional unlimited amount subject to compliance with a maximum consolidated secured leverage ratio test (the "Incremental Facility" and, together with the Revolving Credit Facility and the Term Loan Facility, the "Credit Facilities"). The Revolving Credit Facility has a $60 million sub-facility for the issuance of letters of credit. The Company used the proceeds under the Revolving Credit Facility and the Term Loan Facility to refinance outstanding borrowings under the Existing Credit Agreement and terminate the existing revolving credit commitments thereunder. Borrowings under the Revolving Credit Facility will also be used for general corporate purposes.
The maturity date of the Credit Facilities is October 10, 2028. Amounts under the Revolving Credit Facility may be borrowed, repaid and re-borrowed from time to time until the maturity date. The Term Loan Facility is subject to quarterly amortization as set forth in the Credit Agreement. In addition, the Term Loan Facility is subject to mandatory prepayment in connection with certain debt issuances, asset sales and casualty events, subject to certain reinvestment rights. Voluntary prepayments and commitment reductions under the Credit Agreement are permitted at any time without payment of any prepayment premiums.
At the Company's or the Additional Borrower's election, loans made under the Credit Facilities will bear interest at either (i) a base rate plus an applicable margin, (ii) a "Eurocurrency" rate (as defined in the Credit Agreement) plus an applicable margin, (iii) a "RFR" rate (as defined in the Credit Agreement) plus an applicable margin or (iv) a "Term Benchmark" rate (as defined in the Credit Agreement) plus an applicable margin, subject, in each case, to adjustment based on the Company's consolidated total leverage ratio (as defined in the Credit Agreement).
Certain of the Company's present and future domestic subsidiaries guarantee the obligations under the Credit Facilities. The obligations under the Credit Facilities are secured, pursuant to a guarantee and collateral agreement entered into by and among the Company, the Additional Borrower, the Subsidiary Guarantors and the Agent, by a pledge of substantially all of the assets of the Company, the Additional Borrower and the Subsidiary Guarantors, subject to certain exceptions and exclusions.
The Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on indebtedness, liens, mergers or consolidations, dispositions, restricted payments, investments, prepayments of certain indebtedness, transactions with affiliates, changes in fiscal year, burdensome agreements or changes in the nature of its business. The Credit Agreement also contains customary representations and warranties and events of default.
In addition, the Credit Agreement requires the Company to abide by certain financial covenants calculated for the Company and its restricted subsidiaries on a consolidated basis. Specifically, the Credit Agreement requires that the Company and its restricted subsidiaries not:
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| Permit its consolidated interest coverage ratio to be less than 3.00:1.00; |
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| Permit its consolidated total leverage ratio to be greater than 5.00:1.00 (subject to a temporary step up in connection with certain qualifying material acquisitions); and |
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| Permit its consolidated secured leverage ratio to be greater than 3.50:1.00 (subject to a temporary step up in connection with certain qualifying material acquisitions). |
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
Some of the lenders under the Credit Agreement and their affiliates have various relationships with the Company involving the provision of financial services, including other credit facilities with affiliates of the Company, cash management, investment banking, trust and other services.
Item 2.03. Creation of a Direct Financial Obligation of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 7.01. Regulation FD Disclosure.
On October 11, 2023, the Company issued a press release regarding the Credit Facilities. The press release is being furnished with this Current Report on Form 8-K as Exhibit 99.1 and is hereby incorporated herein by reference.
The information provided in this Item 7.01 (including Exhibit 99.1) shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit
Number | | Description |
| 10.1+ | | |
| 99.1 | | |
| 104 | | Cover page interactive data file (embedded within the Inline XBRL document). |
+ Pursuant to Item 601(a)(5) of Regulation S-K, schedules and similar attachments to this exhibit have been omitted because they do not contain information material to an investment or voting decision and such information is not otherwise disclosed in such exhibit. The Company will supplementally provide a copy of any omitted schedule or similar attachment to the U.S. Securities and Exchange Commission or its staff upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 11, 2023 | | | | | | | | |
| Tempur Sealy International, Inc. |
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| By: | /s/ Bhaskar Rao |
| Name: | Bhaskar Rao |
| Title: | Executive Vice President & Chief Financial Officer |
