Bed Bath & Beyond Inc. Announces Privately Negotiated Senior Notes Exchange and Concurrent Private Placement of Common Stock

UNION, N.J., Nov. 9, 2022 /PRNewswire/ -- Bed Bath & Beyond Inc. (NASDAQ: BBBY) today announced that it has entered into a privately negotiated exchange agreement with an existing holder of its 4.915% Senior Notes due 2034 (the "2034 notes") and 5.165% Senior Notes due 2044 (the "2044 notes"). The existing holder owns approximately $9.5 million aggregate principal amount of 2034 notes and $22.0 million aggregate principal amount of 2044 notes (collectively, the "exchange notes"). Pursuant to the exchange agreement, Bed Bath & Beyond will issue an aggregate of approximately 2.8 million shares of common stock to the existing holder, consisting of the issuance of (a) 1.8 million shares in exchange for the exchange notes, (b) 0.1 million shares in satisfaction of including accrued and unpaid interest thereon the exchange notes, and (c) 0.9 million shares in exchange for a cash payment from the existing holder of $3.5 million (the "transaction"). Following the closing of the transaction, the exchange notes will be cancelled and no longer outstanding. The proceeds of the private placement of common stock will be used for general corporate purposes. The transaction is expected to close on or about November 14, 2022, subject to customary closing conditions. This transaction is exempt from registration under Section 4(a)(2) and Rule 506(c) under the Securities Act of 1933.

Sue Gove, Bed Bath & Beyond's President and CEO said, "We continue to demonstrate progress towards securing a stronger financial position and enabling our strategic repositioning to better serve our customers and gain market share.  Today's announcement outlines a strong framework and compelling opportunity to improve our balance sheet and liquidity by reducing long-term debt, lowering interest expense, and adding an infusion of new capital for equity.  This transaction, in conjunction with our overall enhanced liquidity via our ABL Facility, FILO and current ATM program, underscores our ability to achieve greater stability and flexibility in our business. We remain committed to capturing value for our financial stakeholders and appreciate the support of our holders as we execute our turnaround plans."

This press release is not an offer to buy or sell or the solicitation of an offer to buy any security nor shall there be any sale of these securities in any state in which such offer, solicitation or sales would be unlawful prior to registration or qualification under the securities laws of any such state.

About the Company

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is an omnichannel retailer that makes it easy for our customers to feel at home. The Company sells a wide assortment of merchandise in the Home, Baby, Beauty and Wellness markets. Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Exchange Act of 1934, as amended, including, but not limited to, statements about the transaction. Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, approximate, estimate, assume, continue, model, project, plan, goal, preliminary, and similar words and phrases, although the absence of those words does not necessarily mean that statements are not forward-looking. Our actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors. Such factors include, without limitation: general economic conditions including the recent supply chain disruptions, labor shortages, wage pressures, rising inflation and the ongoing military conflict between Russia and Ukraine; challenges related to our relationships with our suppliers, including the failure of our suppliers to supply us with the necessary volume and type of products; the impact of cost-saving measures; our inability to generate sufficient cash to service all of our indebtedness or our ability to access additional capital; our inability to complete our expected credit financings; changes to our credit rating or the terms on which vendors or others will provide us credit; the impact of strategic changes, including the reaction of customers to such changes; a challenging overall macroeconomic environment and a highly competitive retailing environment; risks associated with the ongoing COVID-19 pandemic and the governmental responses to it, including its impacts across our businesses on demand and operations, as well as on the operations of our suppliers and other business partners, and the effectiveness of our and governmental actions taken in response to these risks; changing consumer preferences, spending habits and demographics; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by us; challenges in executing our omni-channel and transformation strategy, including our ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets we serve; our ability to successfully execute our store fleet optimization strategies, including our ability to achieve anticipated cost savings and to not exceed anticipated costs; our ability to execute on any additional strategic transactions and realize the benefits of any acquisitions, partnerships, investments or divestitures; disruptions to our information technology systems, including but not limited to security breaches of systems protecting consumer and employee information or other types of cybercrimes or cybersecurity attacks; damage to our reputation in any aspect of our operations; the cost of labor, merchandise, logistical costs and other costs and expenses; potential supply chain disruption due to trade restrictions or otherwise, and other factors such as natural disasters, pandemics, political instability, labor disturbances, product recalls, financial or operational instability of suppliers or carriers, and other items; inflation and the related increases in costs of materials, labor and other costs; inefficient management of relationships and dependencies on third-party service providers; our ability to attract and retain qualified employees in all areas of the organization; unusual weather patterns and natural disasters, including the impact of climate change; uncertainty and disruptions in financial markets; volatility in the price of our common stock and its effect, and the effect of other factors on our capital allocation strategy; changes to statutory, regulatory and other legal requirements or deemed noncompliance with such requirements; changes to accounting rules, regulations and tax laws, or new interpretations of existing accounting standards or tax laws; new, or developments in existing, litigation, claims or assessments; and a failure of our business partners to adhere to appropriate laws, regulations or standards. Except as required by law, we do not undertake any obligation to update our forward-looking statements. These statements are based on our management's beliefs and assumptions, which in turn are based on currently available information. These assumptions could prove inaccurate.

Any forward-looking statement we make in this press release or elsewhere speaks only as of the date on which we make it. The risks identified above are not exhaustive, and you should be aware that there may be other risks that could adversely affect our business and financial performance. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. In any event, these and other important factors may cause actual results to differ materially from those indicated by our forward-looking statements. We have no duty, and do not intend, to update or revise the forward-looking statements we make in this press release or elsewhere, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the future events or circumstances described in any forward-looking statement we make in this press release or elsewhere might not occur.

SOURCE Bed Bath & Beyond