Sleep Number Corp 8-K

What Happened
Sleep Number Corporation filed an 8-K reporting that, on June 16, 2026, it and its subsidiaries entered a Fourteenth Amendment to their credit agreement to establish a debtor-in-possession (DIP) financing facility. Prepetition lenders committed up to $260 million of DIP financing (a combination of new-money term loans and roll-up loans). An interim DIP order was entered by the Bankruptcy Court for the Southern District of New York on June 15, 2026; a final hearing is scheduled for July 9, 2026.

Key Details

• Total DIP commitment: up to $260 million, consisting of:
  • Up to $65 million of new-money superpriority senior secured term loans (DIP Loans), with up to $50 million available upon the interim DIP order entry.
  • Up to $195 million of Roll‑Up Loans converting certain prepetition obligations into DIP obligations.
• Interest: either SOFR + 8.00% or base rate + 7.00% per annum. Maturity date: September 16, 2026.
• Security and priority: DIP claims are (or are expected to be) superpriority administrative expenses and secured by first‑priority liens on unencumbered DIP collateral, priming liens on prepetition collateral, and certain junior liens on other DIP collateral as permitted.
• Other terms: subsidiaries guarantee the obligations; optional prepayments allowed (subject to fees); required compliance with budget/variance covenants and customary DIP covenants and events of default. Draws and the facility remain subject to final Bankruptcy Court approval and conditions precedent.

Why It Matters
This DIP financing provides short-term liquidity intended to keep Sleep Number operating while the company pursues a Chapter 11 process—including a planned Section 363 sale or reorganization—giving the company runway to complete a sale or restructuring. However, the financing also raises lender priority over existing creditors (via roll‑up and priming liens) and reflects that the company is in Chapter 11, with material risks disclosed in the filing (including potential cancellation of common shares, acceleration of debt obligations, and uncertainty around the final sale price or ability to emerge from bankruptcy). The facility’s short maturity (Sept. 16, 2026) and court approval conditions mean the company will need to execute its court‑supervised sale or reorganization plan on a relatively accelerated timetable.