Sleep Number Secures $260M Debtor-in-Possession Financing Amid Chapter 11 Bankruptcy
SNBR sits 21% above its 52-week low of $0.145.
Summary
Sleep Number Corp has secured up to $260 million in debtor-in-possession financing, including $65 million in new money, to fund operations during its Chapter 11 bankruptcy, with common shares likely to be canceled.
Key Events · Financing and Capital Events · SNBR
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Debtor-in-Possession (DIP) Financing Secured
Sleep Number Corp and its subsidiaries entered a Fourteenth Amendment to their credit agreement, securing up to $260 million in debtor-in-possession (DIP) financing.
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Financing Structure
The DIP facility includes up to $65 million in new money superpriority senior secured term loans and up to $195 million in roll-up loans converting prepetition obligations.
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Bankruptcy Court Approval
An interim DIP order was entered on June 15, 2026, with a final hearing scheduled for July 9, 2026, approving the financing on an interim basis.
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Maturity and Interest
The DIP Loans and Roll-Up Loans mature on September 16, 2026, and bear interest at SOFR plus 8.00% or the base rate plus 7.00%.
Analysis · SNBR · Manufacturing
This 8-K details the critical debtor-in-possession (DIP) financing secured by Sleep Number Corp, which recently filed for Chapter 11 bankruptcy. The $260 million facility, including $65 million in new money and $195 million in rolled-up prepetition debt, is essential for the company to maintain operations during its bankruptcy proceedings. The financing comes with superpriority status and high interest rates, reflecting the distressed nature of the situation. Crucially, the filing explicitly states the "likely cancellation of our common shares," confirming a near-total loss for existing equity holders. The DIP financing is also tied to strict milestones for an asset sale, with an auction scheduled by July 13, 2026, and a sale by July 31, 2026. Failure to meet these deadlines would trigger an Event of Default.
At the time of this filing, SNBR was trading at $0.18 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $4.1M. The 52-week trading range was $0.15 to $13.94. This filing was assessed with negative market sentiment and an importance score of 10 out of 10.