The RealReal, an online marketplace for authenticated, resale luxury goods, entered into a credit agreement providing for a new $150 million senior secured term loan and a new $25 million senior secured revolving credit facility. The company intends to use the proceeds of the term loan to redeem all of its outstanding 4.25%/8.75% PIK/Cash Pay Senior Secured Notes due 2029 at par. Funding of the term loan and redemption of the 2029 Notes are expected to occur on or about Oct. 19, 2026.
Funds managed by affiliates of Fortress Investment Group will fund the new credit facilities, which initially bear interest at SOFR plus 5.75%, subject to a leverage-based pricing mechanism, payable entirely in cash. The new credit facilities mature in October 2033.
“This refinancing represents a key milestone in our plan to strengthen our balance sheet. Over the last two years, we have successfully lowered our total debt by more than $80M. This transaction builds on that progress by reducing overall interest costs and further extending our maturity profile,” Ajay Gopal, chief financial officer of The RealReal, said. “We believe our consistent progress in growing adjusted EBITDA, coupled with a cash-efficient operating model that translates adjusted EBITDA growth into robust cash flows, positions us well to continue deleveraging in the years ahead.”
Mac Maynard, managing director in corporate credit at Fortress Investment Group, added, “We are pleased to partner with The RealReal on this transaction. We believe The RealReal has established a market-leading position in luxury resale backed by a differentiated business model, and the company’s strong and improving financial profile made this a compelling opportunity for our investors.”
Moelis & Company served as sole placement agent and arranger and Wachtell, Lipton, Rosen & Katz served as legal counsel to The RealReal in connection with the transaction.
Transaction Highlights
- Maturity Extended: The new credit facilities mature in 2033, extending the company’s secured debt maturity by approximately four years and eliminating the potential December 2027 springing maturity under the 2029 Notes. The new credit facilities are subject to a springing maturity if more than $25 million of the company’s 4.000% Convertible Senior Notes due 2031 remain outstanding 91 days prior to their scheduled maturity.
- Lower Total Interest Expense and Elimination of PIK: The initial all-in interest rate on the term loan of SOFR+5.75% compares favorably to the 13.00% all-in interest rate (8.75% cash plus 4.25% PIK) on the 2029 Notes and is expected to reduce the company’s annual total interest expense by approximately $4 million in the first year.
- Added Liquidity: The $25 million revolving credit facility, expected to be undrawn at closing, provides incremental liquidity and financial flexibility.
