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Mattress Firm begins NASDAQ trading

Retailer expects shares to generate more than $92 million

HOUSTON — Shares of Mattress Firm began trading on the NASDAQ Global Select Market on 18 November after the bedding retailer priced its initial public stock offering at $19 per share.

After trading began, the share price almost immediately jumped to $22, and spent most of the morning in the $22 to $22.75 range.

The offering of 5.56 million shares will generate about $95.2 million for the Top 100 retailer, after underwriting discounts and other fees are deducted.

According to documents filed with the Securities and Exchange Commission, the bulk of the proceeds will be used to pay off a 2009 loan that carries an interest rate of 16%. As of Aug. 2, the loan had a balance of $84.4 million.

An additional $4.4 million could be raised if the IPO underwriters exercise their option to purchase an additional 833,333 shares to cover over-allotments. The additional money would be used to pay principal and interest on the company's outstanding payment-in-kind (PIK) notes that carry a 12% interest rate.

As of Nov. 1, the company had 757 company-owned and franchised stores. Since then, Mattress Firm has acquired 55 stores from fellow Top 100 retailer Mattress Giant.

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