Funds managed by affiliates of Fortress Investment Group are providing a new $150m senior secured term loan and a new $25m senior secured revolving credit facility to The RealReal to refinance its 2029 notes, with Fortress Credit Corp. acting as administrative agent and collateral agent.
The Nasdaq-listed company entered the credit agreement on 9 October 2026. Term loan proceeds, together with cash on hand, will be used to redeem in full The RealReal's 4.25%/8.75% PIK/Cash Pay Senior Secured Notes due 2029 at par. Funding and redemption are expected on or about 19 October 2026.
The revolving credit facility is expected to be undrawn at closing. Proceeds will be available for working capital and general corporate purposes.
The facilities initially bear interest at adjusted Term SOFR plus 5.75%, subject to adjustment based on first lien net leverage, and are payable entirely in cash. The company said this compares with a 13.00% all-in rate on the 2029 notes, made up of 8.75% cash and 4.25% PIK, and should reduce annual total interest expense by about $4m in the first year.
The facilities mature in October 2033, seven years from funding, extending The RealReal's secured debt maturity by about four years. It also removes a potential December 2027 springing maturity under the 2029 notes. A new springing maturity applies 91 days before the 2031 convertible notes mature if $25m or more of them remain outstanding.
Ajay Gopal, chief financial officer at The RealReal, said: "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."
The facilities are secured by a first priority lien on substantially all assets. The term loan amortises at 0.25% of initial principal per quarter. Covenants include a first lien gross leverage ratio of 4.75 times through the quarter ending 31 December 2028, stepping down to 4.25 times, and minimum liquidity of $25m at each quarter end.
The RealReal describes itself as an online marketplace for authenticated resale luxury goods, with 45 million members and more than 50 million items sold. It reported a GAAP net loss of $41.8m for FY2025 and targets adjusted EBITDA margins of 15% to 20% in the medium term.
Mac Maynard, managing director in corporate credit at Fortress Investment Group, said: "We are pleased to partner with The RealReal on this transaction."
Moelis & Company was sole placement agent and arranger, and Wachtell, Lipton, Rosen & Katz was legal counsel to The RealReal. Fortress Investment Group had $55bn of assets under management as of 30 June 2026.