After ringing alarm bells about its finances, Bed Bath & Beyond has announced that it has entered into a privately negotiated exchange agreement with an existing holder of its 4.915% senior notes due 2034 and 5.165% senior notes due 2044 and will issue 2.8 million shares of common stock to the existing holder, the company announced.
Under the agreement, the company indicated, Bed Bath & Beyond will issue 2.8 million shares of common stock to the existing holder, consisting of 1.8 million shares in exchange for the exchange notes, 100,000 shares in satisfaction of accrued and unpaid interest on the exchange notes, and 900,000 shares in exchange for a cash payment from the existing holder of $3.5 million,
The closing of the transaction will effectively cancel the notes, the retailer added.
Bed Bath & Beyond will use the proceeds of the private stock placement for general corporate purposes. The parties expect the transaction to close on or about November 14.
In announcing the transaction, Sue Gove, Bed Bath & Beyond’s president and CEO said, “We continue to demonstrate progress towards securing a stronger financial position and enabling our strategic repositioning to better serve our customers and gain market share. Today’s announcement outlines a strong framework and compelling opportunity to improve our balance sheet and liquidity by reducing long-term debt, lowering interest expense, and adding an infusion of new capital for equity. This transaction, in conjunction with our overall enhanced liquidity via our ABL Facility, FILO and current ATM program, underscores our ability to achieve greater stability and flexibility in our business. We remain committed to capturing value for our financial stakeholders and appreciate the support of our holders as we execute our turnaround plans.”
