Serta Simmons Bedding is preparing to seek bankruptcy protection as soon as January, Bloomberg News reported. The closely held mattress manufacturer has been in confidential talks with its creditors over a restructuring plan, which may involve giving control to certain first-lien lenders. Talks are ongoing and plans could change, the people added. It isn’t yet clear if the company needs financing to fund its operations through chapter 11, they said. Serta’s entire debt load of more than $2 billion matures next year. Its approximately $843 million first-lien term loan due November 2023 is quoted at around 9 cents on the dollar, according to data compiled by Bloomberg. Given the sizable debt wall and deteriorating performance amid an inflationary environment, Serta will likely see a default, bankruptcy filing or debt restructuring in the coming months, S&P Global Ratings wrote in a note in August. Lower consumer confidence and slowdown in the housing market will likely hurt demand for bedding related products, the credit grader said.
