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October 19, 2022

Bed Bath & Beyond Seeks Senior Notes Exchange To Reduce Debt


Bed Bath & Beyond has commenced offers to exchange any and all of its outstanding senior notes but has warned that if the initiative is unsuccessful, it may consider bankruptcy.

Sue Gove, director and interim CEO of Bed Bath & Beyond, said, “We believe this transaction will put us in a stronger financial position going forward by significantly reducing our debt and interest expense upon successful completion. By proactively focusing on our senior notes, we also intend to address the maturity of our nearest-term 2024 notes and any impact they may have on our current and future business. This transaction is intended to create greater stability and flexibility in our business which we believe benefits all stakeholders.”

In a research note, Pulse Ratings noted that, in its prospectus, Bed Bath and Beyond warned that if it can’t complete the exchange offers or at least receive meaningful participation, the company may have to consider other alternatives available to deleverage and strengthen the company balance sheet, including capital markets transactions, repurchases, redemptions, exchanges or other refinancings of existing debt, the potential issuance of equity securities, the potential sale of assets and businesses “and/or other strategic transactions and/or measures, including obtaining relief under the U.S. Bankruptcy Code.”

Pulse Ratings pointed out that, if successful, the exchange offer would significantly improve Bed Bath & Beyond’s balance sheet but, if not, management had warned that it may consider bankruptcy as an option.

Although company shares initially climbed on the October 18t announcement of its exchange offering, reaching as high as $5.53, the stock price steadily declined so that by early afternoon on October 19, it had slipped below $5.

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