TheRealReal refinances debt with $150M term loan, extending maturity to 2033

The RealReal, Inc. (Nasdaq: REAL) announced it has entered into a credit agreement for a new $150 million senior secured term loan and a $25 million senior secured revolving credit facility, funded by affiliates of Fortress Investment Group LLC.

The company plans to use the term loan proceeds to redeem all outstanding 4.25%/8.75% PIK/Cash Pay Senior Secured Notes due 2029 at par, with funding and redemption expected to occur on or about October 19, 2026.

The new credit facilities bear interest at SOFR plus 5.75%, subject to a leverage-based pricing mechanism, and mature in October 2033. The initial all-in rate compares to the prior 13.00% all-in rate on the 2029 notes, and the company expects the refinancing to reduce annual total interest expense by approximately $4 million in the first year, based on the one-year swap rate for one-month Term SOFR of 4.432% as of September 30, 2026.

The new facilities also eliminate a potential December 2027 springing maturity that existed under the 2029 notes. They 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.

The $25 million revolving credit facility is expected to be undrawn at closing.

"This refinancing represents a key milestone in our plan to strengthen our balance sheet," said Ajay Gopal, Chief Financial Officer. "Over the last two years, we have successfully lowered our total debt by more than $80M."

The company set a medium-term target of reducing total leverage to $150 million, noting potential paths including repaying convertible notes due 2028 from cash on hand and converting convertible notes due 2031 into common equity.

Moelis & Company LLC served as sole placement agent and arranger, and Wachtell, Lipton, Rosen & Katz served as legal counsel to The RealReal. The company said it expects to discuss third-quarter 2026 financial results on an earnings call scheduled for October 29, 2026.

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