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Customers shop at a Bed Bath & Beyond store on January 05, 2023 in Forest Park, Illinois.
Scott Olson/Getty Images
trading in
Bed Bath & Beyond
stock was halted on Thursday after the company said it had triggered “certain events of default” earlier this month.
Bed Bath (ticker:
BBBY
) said that happened around Jan. 13, when the company was unable to prepay a so-called overadvance on its revolving credit facility and satisfy a financial covenant, among other things.
As a result, representatives of the lender told the company on Wednesday that the principal amount of all outstanding loans under this agreement was “due and payable immediately.” In addition, all outstanding loans under the credit facility will bear interest at an additional default rate of 2% per annum.
“At this time, the Company does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all
strategic alternatives, including restructuring its debt under the US Bankruptcy Code,” Bed Bath said in a securities filing.
“At this time, the Company does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all
strategic alternatives, including restructuring its debt under the US Bankruptcy Code,” Bed Bath said in the filing.
The company’s revolving credit facility was one of the company’s few remaining sources of liquidity. Bed Bath said it is undertaking a number of actions to improve its financial position, including cutting costs, lowering capital expenditures, and reducing its store footprint, but the measures “may not be successful,” the company said in the filing.
The disclosure came in the company’s quarterly 10-Q filing with the Securities and Exchange Commission. Earlier in January, Bed Bath said it wasn’t going to be able to file the 10-Q in time to meet SEC requirements, prompting the
Nasdaq Stock Market
to send a notice warning the company it was at risk of being delisted.
Before Thursday’s trading halt, the stock was down 16% to $2.71.
(This is a developing story. Please check back soon for more details.)
Write to Sabrina Escobar at [email protected]
.