US retailer Bed Bath and Beyond (BBBY) is said to have come close to securing a a $370mn loan from investment firm Sixth Street, WSJ reported. The company is looking to shore up its liquidity, balance sheet, and repay debt. As of May, BBBY had cash & cash equivalents of only $107.5mn as compared to long-term debt of $1.4bn and total liabilities of $5.2bn. BBBY’s total asset value stood at $220mn. In early August, the troubled company said in a regulatory filing that it was working with financial advisers and lenders to strengthen its balance sheet. The final terms of the above deal are not yet out. Analysts indicated about issues like high cash burn and much-needed new financing. The company changed some board of directors and said it would explore shedding its baby products division. Earlier this week, the American retailer was downgraded to CCC from B- with a negative outlook by S&P on tightening liquidity, poor financials, and debt default worries. Just a month earlier, Moody’s had cut the company’s rating to Caa2 from B2. The company has been struggling with weak earnings too – during 1Q 2022, BBBY reported a 25% YoY revenue drop to $1.46bn and a net loss of $358mn.
With the news of its loan facility, Bed Bath’s 3.749% 2024s were up 3.25 points to 35.75 cents on the dollar. Its share price also rallied by 18% yesterday to close at $10.36.
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