UNION, N.J. – Amid reports that some Bed Bath & Beyond suppliers have halted shipping, the retailer today announced that it has bought back $31.5 million in bonds by issuing 2.8 million shares to the noteholder.
Following the closing of the transaction, which is expected to close around Nov. 14, the exchange notes will be cancelled and no longer outstanding. The company said it plans to use the proceeds for general corporate purposes.
“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,” said Sue Gove, who two weeks ago was named Bed Bath & Beyond’s permanent president and CEO.
Last month, the company announced an offer to exchange “any and all” of its outstanding senior notes in a bid to strengthen its balance sheet. Although BBB execs said in September that the company had been making progress in payments owed to suppliers, Bloomberg reported last week that several suppliers had either stopped shipping or begun restricting shipments.
“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,” Gove said today.
For the first six months ended Aug. 27, Bed Bath & Beyond’s sales tumbled 27% to $2.9 billion and its net loss widened to $724 million from a net loss of $124 million in the prior year period. Bed Bath reportedly burned through $809 million in cash during the first half of the year.
The company is expected to report its third quarter results in December.