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Bed Bath & Beyond's stock falls as retailer plans to issue shares to pay off some debt

CNBC 11/14/2022 Lillian Rizzo
  • Bed Bath & Beyond's stock dropped after it said in public filings Monday that it planned to issue stock to repay a small portion of its hefty debt load.
  • The retailer said it would issue 11.7 million shares to some holders of its bonds.
  • Bed Bath & Beyond has three sets of unsecured bonds that mature in 2024, 2034 and 2044.
A person exits a Bed Bath & Beyond store in New York City, June 29, 2022. © Provided by CNBC A person exits a Bed Bath & Beyond store in New York City, June 29, 2022.

Bed Bath & Beyond said Monday it would issue shares to some of its bondholders in exchange for paying off a small portion of its roughly $1 billion debt load.

Bed Bath & Beyond's fell more than 5% to $3.74 on Monday following the announcement of its stock dilution. Its decline had been steeper earlier in the day. The stock, which is down 74% so far this year, hit a new 52-week low Monday.

In addition to its mountain of debt, the troubled retailer has recently been grappling with a leadership shakeup, strained relationships with suppliers and the aftermath of a meme-stock frenzy fueled by activist investor Ryan Cohen, who later sold his shares.

Bed Bath & Beyond has more than $1 billion in unsecured notes with maturity dates spread across 2024, 2034 and 2044.

On Monday, Bed Bath & Beyond said it would issue 11.7 million in stock to pay off $123 million – about $69 million of the 2024 notes, $5.8 million of the 2034 notes and $48.2 million of the 2044 notes. The unsecured notes have all been trading below par.

In August, Bed Bath & Beyond announced new debt funding that was expected to give it some breath room, especially with suppliers.

The retailer has been fighting to win back customers ahead of what could be a make-or-break holiday season.

Earlier this month, the company's chief customer officer resigned, the latest in a list of leadership changes for Bed Bath & Beyond. Earlier this year, the board pushed out Chief Executive Mark Tritton and Chief Merchandising Officer Joe Hartsig. Meanwhile, its chief accounting officer resigned and the company eliminated the chief operating officer and chief stores officer roles. In September, CFO Gustabo Arnal died by suicide.


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