Bed Bath & Beyond stock plunges, halted after filing shows default on loans

Bed Bath & Beyond Inc. shares plunged more than 20% and were halted Thursday afternoon, after the retailer disclosed in a filing that it was in default on loans that have been called in.

The struggling retailer finally filed its quarterly report with the Securities and Exchange Commission on Thursday at roughly 2:30 pm Eastern time, after being threatened with having its stock delisted for being late with the required report. Included in the filing is news that Bed Bath & Beyond BBBY,
had defaulted on loans earlier this month, and executives were informed on Wednesday that the debt was due immediately.

“On or around January 13, 2023, certain events of default were triggered under the Company’s Credit Facilities as a result of the Company’s failure to prepay an overadvance and satisfy a financial covenant, among other things,” the filing reads. “As a result of the continuance of such events of default, on January 25, 2023, the administrative agent under the Amended Credit Agreement notified the Company that (i) the principal amount of all outstanding loans under the Credit Facilities, together with accrued interest thereon, the FILO Applicable Premium and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Company accrued under the Amended Credit Agreement, are due and payable immediately.”

Shares had traded between $3.25 and $3.47 on the day until about 5 minutes after the filing was released, when shares suddenly dove, triggering a halt. The stock fell as low as $2.10 and was halted three times between 2:46 pm and 3:14 pm, when they were trading for $2.52, a 22.2% decline on the day.

The struggling retailer admitted earlier this year that it has “substantial doubt” about its “ability to continue as a going concern” and may need to declare bankruptcy. The home goods retailer also said that it expects to record lower sales for the latest quarter than analysts were anticipating.


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