Clock starts ticking as Bed Bath & Beyond fails to make major interest payment
Union, N.J. – A week after receiving a default notice from lender JP Morgan, Bed Bath & Beyond yesterday took a powder on more than $1 billion in interest payments on bonds that came due Feb. 1.
A Bed Bath & Beyond spokeswoman confirmed the missed payments to Bloomberg in a written statement.
“Multiple paths are being explored and we are determining our next steps carefully, and in a timely manner,” she told the news agency.
The default kicks off a 30-day grace period during which Bed Bath & Beyond can make the payments or negotiate alternate arrangements.
Sources recently told Reuters that Bed Bath & Beyond Inc. is preparing to seek bankruptcy protection as soon as this week. Just days ago, the company added 87 Bed Bath & Beyond stores and 5 buybuy Baby units to the list of 150 closings it began scheduling last year. It also began shutting down the entire Harmon health & beauty chain, which operates 52 units.
Last week, Bed Bath received a notice of default and request for immediate payment on its $550 million asset-backed loan with JP Morgan. It also owes $375 million on a loan from lender Sixth Street. The company has reportedly been in talks with Sixth Street for an additional loan to cover it in bankruptcy proceedings.