THE REALREAL ANNOUNCES REFINANCING OF 2029 SENIOR SECURED NOTES WITH NEW $150 MILLION TERM LOAN AND $25 MILLION REVOLVING CREDIT FACILITY

The refinancing is expected to eliminate payment-in-kind interest and reduce first-year annual total interest expense by approximately $4 million.

Rhea-AI Summary

The RealReal (REAL) entered a credit agreement for a $150 million senior secured term loan to refinance its outstanding 2029 notes. The agreement also provides a $25 million revolving credit facility, expected to be undrawn at closing. Funds managed by Fortress Investment Group affiliates will fund both facilities. Term-loan funding and redemption of the 2029 notes at par are expected on or about October 19, 2026.

The facilities mature in October 2033, subject to a springing maturity condition, and initially charge SOFR plus 5.75%, payable entirely in cash with leverage-based pricing. The company expects approximately $4 million less annual total interest expense in the first year versus the notes' 13.00% combined cash and payment-in-kind interest rate. It targets reducing total leverage to $150 million in the medium term and Adjusted EBITDA margins of 15–20%.

8 points · 0 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 6 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.$150 million term loan provides funding to redeem all outstanding 2029 secured notes at par. 14% of market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.October 2033 maturity extends secured debt maturity approximately four years and eliminates the potential December 2027 springing maturity.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Approximately $4 million lower annual total interest expense expected in the first year; payment-in-kind interest eliminated.
• Moderate pointMore than $80 million in total debt reduced over the last two years.
• Minor point. Forward-looking: it has not happened yet and may not happen.$25 million revolving facility, expected undrawn at closing, provides incremental liquidity.

3 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.$150 million total leverage is the company's medium-term reduction target.
• Minor point. Forward-looking: it has not happened yet and may not happen.15–20% Adjusted EBITDA margin remains the company's medium-term target.
• Minor point. Forward-looking: it has not happened yet and may not happen.Run-rate earnings per share accretion expected from lower interest expense, excluding one-time transaction costs.

Negative

• Moderate pointSOFR plus 5.75% initial borrowing rate is payable entirely in cash, subject to leverage-based pricing.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Funding and redemption remain expected on or about October 19, 2026, rather than completed.
• Minor pointSpringing maturity applies if over $25 million of 2031 convertible notes remain outstanding 91 days before scheduled maturity.
• Minor point. Forward-looking: it has not happened yet and may not happen.2028 convertible-note repayment from cash at stated maturity is a potential deleveraging path, not a committed action.
• Minor point. Forward-looking: it has not happened yet and may not happen.2031 convertible-note conversion into common equity could dilute shareholders if holders elect under the indenture.
• Minor point. Forward-looking: it has not happened yet and may not happen.One-time transaction costs are excluded from the company's expected run-rate earnings per share accretion.

News Explained

The company’s possible path to its $150 million medium-term leverage target includes repaying its 2028 convertible notes with cash at maturity and, only if holders elect under the indenture, converting 2031 notes into common equity, which could increase the share count and dilute existing holders.

Key Figures

Term loan: $150 million Revolving credit facility: $25 million Initial term-loan interest rate: SOFR plus 5.75% +5 more

Term loan

$150 million

New senior secured term loan

Revolving credit facility

$25 million

New senior secured facility

Initial term-loan interest rate

SOFR plus 5.75%

New credit facilities; payable entirely in cash

Prior notes all-in interest rate

13.00%

2029 Notes: 8.75% cash plus 4.25% PIK

Expected annual interest expense reduction

Approximately $4 million

First year

New facilities maturity

October 2033

New Credit Facilities

Medium-term total leverage target

$150 million

Company target

Adjusted EBITDA margin target

15-20%

Medium-term target

Key Terms

sof r, pik, springing maturity, convertible notes

4 terms

sof r financial

"initially bear interest at SOFR plus 5.75%"

SOFR (Secured Overnight Financing Rate) is a benchmark interest rate that measures the cost of overnight borrowing secured by U.S. Treasury securities in the repurchase (repo) market. It is calculated from actual transactions in overnight Treasury repo markets, so it reflects short-term secured funding costs and is published daily; because it is overnight and transaction-based, it does not include a longer-term credit risk premium and may require term adjustments or credit spreads when used to price loans or derivatives with multi-day or multi-year maturities.

pik financial

"4.25%/8.75% PIK/Cash Pay Senior Secured Notes due 2029"

Payment In Kind (PIK) refers to interest or dividends paid with additional securities instead of cash. The company adds interest to the principal or issues more bonds/shares rather than paying cash. PIK conserves cash short-term but is riskier as debt compounds over time.

springing maturity financial

"eliminating the potential December 2027 springing maturity under the 2029 Notes"

A contractual feature in a debt instrument or credit agreement that makes the loan's maturity date change only if a specified trigger event occurs. Commonly the clause causes the debt to accelerate to an earlier due date (or, less often, to extend to a later date) when conditions named in the contract happen — for example a covenant breach, insolvency, or non-payment — so the stated maturity is contingent on those events rather than unconditional. The exact effect and the triggers are determined by the instrument's legal language; it is not a standardized market term and must be read in the specific contract.

convertible notes financial

"more than $25 million of the Company's 4.000% Convertible Senior Notes due 2031"

Convertible notes are a type of short-term loan that a company receives from investors, which can later be turned into company shares instead of being paid back in cash. They matter to investors because they offer a way to support a company early on while giving the potential to own a stake in its success if the company grows and later raises more funding.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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• Refinancing Extends Secured Debt Maturity to 2033 and Reduces Interest Expense
• Outlines Medium-Term Target for Leverage

SAN FRANCISCO, Oct. 15, 2026 /PRNewswire/ -- The RealReal, Inc. (Nasdaq: REAL) (the "Company"), the world's largest online marketplace for authenticated, resale luxury goods, today announced that it has 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 (collectively, the "New Credit Facilities"). 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 (the "2029 Notes") at par. Funding of the term loan and redemption of the 2029 Notes are expected to occur on or about October 19, 2026.

Funds managed by affiliates of Fortress Investment Group LLC ("Fortress") 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. Additional information regarding the New Credit Facilities will be included in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission.

"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," said Ajay Gopal, Chief Financial Officer. "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."

"We are pleased to partner with The RealReal on this transaction," said Mac Maynard, Managing Director in Corporate Credit at Fortress Investment Group. "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 LLC 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 year¹.
  
  
• Added Liquidity: The $25 million revolving credit facility, expected to be undrawn at closing, provides incremental liquidity and financial flexibility.

Balance Sheet Priorities

Today's transaction is a meaningful milestone in The RealReal's multi-year effort to simplify and strengthen its balance sheet. It sets the foundation to target reducing total leverage to $150 million in the medium-term. One potential path for doing so would be the Company repaying its convertible notes due 2028 from cash on hand at their stated maturity, and, if elected by the holders thereof in accordance with the terms of the indenture, converting convertible notes due 2031 into the Company's common equity.

The Company remains focused on topline growth, expanding its Adjusted EBITDA Margins to its medium-term target of 15-20% and translating the resulting increase in Adjusted EBITDA to operating cash flows. This will enable it to execute on its plan to continue deleveraging and strengthening its balance sheet.

This refinancing is expected to be accretive to earnings per share on a run-rate basis, excluding one-time transaction costs, as the lower all-in interest rate reduces the Company's total interest expense.

The Company looks forward to discussing its third quarter 2026 financial results and business performance in detail on its upcoming earnings call scheduled for October 29, 2026.

About The RealReal, Inc.
The RealReal is the world's largest online marketplace for authenticated resale luxury goods, trusted by a community of 45 million members. Its full-service consignment model across fashion, fine jewelry and watches, art and home, makes it easy for customers to buy and sell luxury wherever they are. The Company combines rigorous, expert-led authentication with AI and proprietary technology to optimize operations and pricing while streamlining the customer experience. Backed by 15 years of proprietary data and more than 50 million items sold, The RealReal has become the preferred destination for modern luxury resale, redefining the luxury lifecycle.

About Fortress Investment Group LLC
Fortress Investment Group LLC is a leading, highly diversified global investment manager serving institutional clients and private investors worldwide. Founded in 1998, Fortress manages $55 billion of assets under management as of June 30, 2026, across a range of credit and real estate, private equity and permanent capital investment strategies. AUM refers to assets Fortress manages, including capital that Fortress has the right to call from investors, or investors are otherwise required to contribute, pursuant to their capital commitments to various funds or managed accounts.

Forward Looking Statements
This press release contains forward-looking statements relating to, among other things, the future performance and leverage profile of The RealReal that are based on the Company's current expectations, forecasts and assumptions and involve risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "target," "contemplate," "project," "believe," "estimate," "predict," "intend," "potential," "continue," "ongoing" or the negative of these terms or other comparable terminology. These statements include, but are not limited to, statements about the New Credit Facilities, future operating and financial results, including our strategies, plans, commitments, objectives and goals, in particular in the context of the recent geopolitical events, and uncertainty surrounding macro-economic trends, financial guidance, anticipated growth in 2026, the anticipated impact of generative AI, and financial targets, goals and projections. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to, the redemption of the 2029 Notes does not occur, our ability to generate sufficient cash flows, or otherwise obtain funds, to repay or refinance our convertible notes due 2028 when due, whether our convertible notes due 2031 are converted into equity by the noteholders thereof, which primarily depends on, among other things, the trading price of our common stock relative to the conversion price and on the elections of noteholders, inflation, macroeconomic uncertainty, geopolitical instability, any failure to generate a supply of consigned goods, pricing pressure on the consignment market resulting from discounting in the market for new goods, failure to efficiently and effectively operate our merchandising and fulfillment operations, labor shortages and other reasons.

More information about factors that could affect the Company's operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the Company's Investor Relations website at investor.therealreal.com or the SEC's website at sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the Company on the date hereof. The Company assumes no obligation to update such statements, except as required by law.

¹ Based on the 1-year swap rate for 1-month Term SOFR of 4.432% as of September 30, 2026

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SOURCE The RealReal

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What are the terms of The RealReal's new refinancing facilities?

The RealReal entered an agreement for a $150 million senior secured term loan and a $25 million senior secured revolving facility. Both mature in October 2033, subject to a springing maturity condition. Their initial interest rate is SOFR, a benchmark rate, plus 5.75%, payable entirely in cash and subject to leverage-based pricing.

When will The RealReal redeem its 2029 secured notes?

Term-loan funding and redemption of all outstanding 2029 secured notes at par are expected on or about October 19, 2026. The company intends to use the term-loan proceeds for the redemption.

What could trigger early maturity of The RealReal's new credit facilities?

The facilities have a springing maturity if more than $25 million of The RealReal's 4.000% Convertible Senior Notes due 2031 remain outstanding 91 days before their scheduled maturity. This condition can bring forward the facilities' maturity from October 2033.