Item 1.01. Entry into a Material Definitive Agreement
As previously reported, on September 30, 2026 (the “Petition Date”), Leslie’s, Inc. (the “Company”) and its subsidiaries Leslie’s Poolmart, Inc., Cortz, Inc., LPM Manufacturing, Inc., Horizon Spa & Pool Parts, Inc., Hot Tub Works, LLC, Pool Parts, Inc., RAM Chemical & Supply, Inc., SPP Holding Corporation and Stellar Manufacturing, LLC (collectively, the “Company Subsidiary Parties” and together with the Company, the “Company Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) to implement a pre-arranged chapter 11 plan of reorganization (the “Plan”). On the Petition Date, prior to commencing the Chapter 11 Cases, the Company Parties entered into a restructuring support agreement (together with all exhibits, annexes and schedules thereto, the “RSA”) with certain holders of, or investment advisors, sub-advisors or managers to or of funds or accounts that hold or beneficially hold, loans under the Amended and Restated Term Loan Credit Agreement, dated as of March 9, 2021 (as amended, restated, amended and restated or otherwise modified or supplemented from time to time, the “Prepetition Term Loan Credit Agreement”; such creditors party to the RSA, and, together with any subsequent holder, investment advisor, sub-advisor or manager that becomes a party to the RSA, the “Consenting Term Loan Lenders”). The material terms of the Plan are set forth in the term sheet attached as Exhibit A to the RSA (the “Restructuring Term Sheet,” and the transactions described therein, the “Restructuring Transactions”). Concurrently with entrance into the RSA, the Company Parties and the ABL DIP Lenders (as defined below) entered into a commitment letter in respect of the commitment to provide the ABL DIP Facility (as defined below).
In connection with the Chapter 11 Cases, the Company Parties filed a motion for approval of the Term Loan DIP Facility (as defined below) and ABL DIP Facility [Docket No. 33]. On October 2, 2026, following receipt of interim approval from the Bankruptcy Court on October 1, 2026 (the “Interim DIP Order”), the Company Parties entered into (i) a credit agreement (the “Term Loan DIP Credit Agreement”) with certain lenders (the “Term Loan DIP Lenders”) providing for a $90.0 million senior secured super-priority debtor-in-possession term loan facility (the “Term Loan DIP Facility”) and (ii) a credit agreement (the “ABL DIP Credit Agreement”) with certain lenders (the “ABL DIP Lenders”) providing for a senior secured super-priority debtor-in-possession asset-based revolving credit facility (the “ABL DIP Facility”) consisting of $225.0 million in aggregate principal amount of commitments.
The Term Loan DIP Facility provides that the Term Loan DIP Facility will be available in two draws. The Term Loan DIP Facility provides that a principal amount of $45 million (the “Interim DIP Term Loans”) will be available in a single draw upon satisfaction of certain conditions, including entry of the Interim DIP Order and an additional $45 million principal amount will be available in a single draw upon satisfaction of certain conditions, including the entry of a final order. The Company borrowed the Interim DIP Term Loans on October 2, 2026, and as of such date $45.0 million aggregate principal amount was outstanding under the Term Loan DIP Facility. Each of the lenders under the Prepetition Term Loan Credit Agreement that are not party to the RSA as of the Petition Date may, within ten business days following the first business day after the funding of the Interim DIP Term Loans, elect to commit to participate ratably (based upon relative holdings of obligations under the Prepetition Term Loan Credit Agreement) in the Term Loan DIP Facility.
No loans were drawn under the ABL DIP Facility on October 2, 2026. In addition, as of October 2, 2026, approximately $50 million aggregate principal amount of revolving loans and approximately $11.145 million in respect of issued an undrawn letters of credit remained outstanding under the Credit Agreement, dated as of October 16, 2012 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, including pursuant to Amendment No. 1 through Amendment No. 7, the “Prepetition ABL Credit Agreement”), by and among Leslie’s Poolmart, Inc., as the parent borrower, the Company, as holdings, the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent and collateral agent, which loans are subject to a dollar-for-dollar “creeping roll-up” into the ABL DIP Facility, with any such loans remaining outstanding upon entry of the final order to be refinanced as loans under the ABL DIP Facility.
The proceeds of all or a portion of the proposed Term Loan DIP Facility and ABL DIP Facility will be used by the Company Parties to (i) pay certain costs, fees and expenses related to the Chapter 11 Cases and (ii) fund working capital needs and expenditures of the Company Parties, in all cases subject to the terms of credit agreements governing the Term Loan DIP Facility and the ABL DIP Facility, respectively, and applicable orders of the Bankruptcy Court.
Each of the ABL DIP Facility and the Term Loan DIP Facility is secured by liens on substantially all assets of the Company Parties (the “DIP Collateral”), subject to the Interim DIP Order. Under the Interim DIP Order, the DIP Collateral is divided into two priority pools generally corresponding to the prepetition collateral arrangements: collateral on which the ABL DIP Facility has first-priority liens (the “ABL Priority Collateral”) and collateral on which the Term Loan DIP Facility has first-priority liens (the “Term Priority Collateral”). Each of the ABL DIP Facility and the Term Loan DIP Facility holds junior liens on the other’s priority collateral. The relative priorities of the liens on each category of DIP Collateral are as set forth in the Interim DIP Order. The ABL DIP Facility and the Term Loan DIP Facility bear interest at a rate of SOFR plus 3.25% per annum and SOFR plus 6.50% per annum, respectively, and each mature six months from October 2, 2026, subject to customary milestones and earlier maturity upon the effective date of the Plan (the “Plan Effective Date”). Each Term Loan DIP Lender earns an upfront premium in an aggregate amount equal to 9.50% of the obligations under the Term Loan DIP Facility actually funded by such Term Loan DIP Lender (including amounts funded through Jefferies Capital Services, LLC as fronting lender), payable in full in the form of term loans under the Term Loan DIP Facility.
Each of the Term Loan DIP Facility and the ABL DIP Facility includes certain conditions precedent, representations and warranties, affirmative and negative covenants and events of default customary for financings of this type and size. The ABL DIP Facility has a substantially similar borrowing base calculation as the Prepetition ABL Credit Agreement. Certain bankruptcy-related events are also events of default, including, but not limited to, the failure to meet the milestones in the Chapter 11 Cases, dismissal by the Bankruptcy Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code and certain other events related to the impairment of the Term Loan DIP Lenders’ and ABL DIP Lenders’ rights or liens granted under the Term Loan DIP Credit Agreement and ABL DIP Credit Agreement, respectively.
