Home goods retailer Bed Bath & Beyond (NASDAQ: BBBY) indicated in a filing today that it is considering filing for bankruptcy following the firm defaulting on a credit facility earlier this month. The revelation follows reported discussions earlier this month between the company and lenders for a bankruptcy loan.
Bed Bath & Beyond reportedly triggered certain events of default under its ABL and FILO facility on January 13, which are secured by first priority liens on substantially all assets of the company. Following the default, the administrative agent reportedly notified the company yesterday that all outstanding principal on the loans are due and payable immediately, and that it must cash collateralize its letter of credit obligations.
READ: Bed Bath & Beyond Discussing Bankruptcy Loan With Lenders
The company had $550 million of borrowings outstanding under the ABL facility, and $375.0 million of borrowings outstanding under the FILO facility as of November 26. A further $186.2 million of outstanding letters of credit were issued under the ABL facility as well. In announcing the default, the firm indicated that they “do not have sufficient resources to repay the amounts under the credit facilities.”
Due to the default of the credit facilities, the company is currently considering all strategic alternatives, including restructuring or refinancing debt, seeking additional equity or capital, reducing its operations, or selling assets, along with other strategic transactions such as a filing under the US Bankruptcy code.
READ: BBBY: Bed Bath & Beyond Rises 164% After Analysts Call For Bankruptcy
As of November 26, the company had a reported cash position of $153.5 million, and inventory on the books of $1.4 billion. The current portion of long-term debt due meanwhile sits at $909.3 million, on top of $697.9 million in accounts payable and $356.5 million in accrued expenses and other current liabilities.
The potential filing follows the announcement last August that the company would be closing 150 retail locations while simultaneously conducting layoffs in an effort to stay afloat. At the same time, the company discontinued a third of its own brands and cut roles from its C-suite.
Bed Bath & Beyond last traded at $2.70 on the Nasdaq.
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