TheRealReal, Inc. has entered into a definitive credit agreement with Fortress Credit Corp., as administrative agent, and other lenders. The agreement establishes a senior secured term loan facility with an aggregate principal amount of $150 million and a senior secured revolving loan facility with aggregate commitments of $25 million. The transaction is expected to close on or about October 19, 2026.
The company intends to use the proceeds from the term loan to redeem in full its existing 4.25%/8.75% PIK/Cash Senior Secured Notes due 2029. The revolving facility is expected to remain undrawn at closing and will be used for working capital and general corporate purposes.
Under the terms of the agreement, the term loan will initially accrue interest at a rate per annum equal to adjusted Term SOFR plus 5.75%. The facilities mature on the seven-year anniversary of the funding date, or on the date that is 91 days prior to the maturity of the company’s 4.000% Convertible Senior Notes due 2031, whichever is earlier. The term loan amortizes in equal quarterly installments of 0.25% of the initial principal amount, commencing after the funding date.
The company is required to maintain a first lien gross leverage ratio of 4.75 to 1.00 through the fiscal quarter ending December 31, 2028, and 4.25 to 1.00 thereafter. Additionally, the company must maintain liquidity of at least $25 million as of the last day of each fiscal quarter starting with the first full fiscal quarter following the closing date.
The facilities are secured by a first priority lien on substantially all assets of the company and its guarantors. The company’s obligations under the agreement are guaranteed by certain future subsidiaries. The agreement includes covenants that limit the ability to incur debt, make investments, enter into mergers, and pay dividends, subject to certain exceptions.
