Shares of Bed Bath & Beyond (NASDAQ:BBBY) stock are in full focus following an announcement of a special record date of Feb. 27 to pay late senior note interest. The interest payment was previously due on Feb. 1, which Bed Bath & Beyond could not pay. Holders of senior notes as of Feb. 27 will then receive the payment on Feb. 28. This includes holders of “3.749% Senior Notes due 2024, 4.915% Senior Notes due 2034 and 5.165% Senior Notes due 2044.”
The Feb. 28 payment has already been pre-funded with the assistance of the Bank of New York Mellon (NYSE:BK).
“Today’s announcement is an important step in resetting our operational and financial foundation and meeting our commitments,” said CEO Sue Gove. “We remain focused on utilizing our current and future financing to execute our turnaround plans and restore our position with customers.”
Dear BBBY Stock Fans, Mark Your Calendars for Feb. 27
In a separate filing, Bed Bath & Beyond disclosed that it will be able to make the senior note interest payments due to a $24 million assistance package. The package allows the retailer to “try to raise as much as $1 billion in installments.”
This is clearly a step in the right direction for the near-bankrupt company. At the same time, store closures threaten the long-term viability of BBBY. According to Business Insider, 416 U.S. Bed Bath & Beyond stores are set to close this year, while all 65 stores in Canada are also slated to close. The company ultimately seeks to have 360 flagship stores and 120 Buy Buy Baby stores. That’s compared to 953 stores over a year ago.
Earlier this month, Bed Bath announced a $225 million underwritten public offering, with the expectation of receiving another $800 million in future installments. The company warned it could provide “no assurance” of receiving the $800 million. The offering consisted of warrants to purchase common stock, Series A convertible preferred stock, and warrants to purchase Series A convertible preferred stock.
Proceeds from the offering will be used to repay outstanding credit facility borrowings. Bed Bath & Beyond also expects to reborrow loans from its credit facility to support its comeback plan and strategic initiatives for this year.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
