Bed Bath & Beyond Inc. said it reached a privately negotiated exchange agreement with an existing bondholder to swap $31.5 million of bond principal for equity, Bloomberg reported. An existing holder of $9.5 million of Bed Bath & Beyond’s 4.915% senior notes due 2034 and $22 million of the retailer’s 5.165% bond due 2044 will swap the obligations for 2.8 million
shares of common stock. Bed Bath & Beyond is issuing 1.8 million new shares in exchange for the bonds, plus another 100,000 shares to cover accrued and unpaid interest. It’s also issuing 900,000 shares to the undisclosed holder for $3.5 million cash. It will use proceeds from the stock sales for general corporate purposes, it said. The company’s shares declined 3.4% to $3.87 after the deal was announced. In a statement, Bed Bath & Beyond Chief Executive Officer Sue Gove said the transaction reduces long term debt and improves the company’s balance sheet. The deal is expected to close Nov. 14. The deal comes as Bed Bath & Beyond is seeking to conduct a larger debt swap of notes due in 2024, as well as the 2034 and 2044 securities.
