The Wall Street Journal reports that "Bed Bath & Beyond Inc. said it doesn’t have the funds to repay its banks after they determined the retailer has defaulted on its credit lines.
"The home-goods chain said Thursday it received a notice of default from JPMorgan Chase & Co. on Wednesday. The banks are calling for an immediate repayment of all outstanding loans under the credit agreement … The company has $550 million in loans outstanding from the banks led by JPMorgan, as well as $375 million from a facility provided by Sixth Street Partners, according to a securities filing. It had $154 million in unrestricted cash and equivalents in late November.
"As a result of the default, Bed Bath’s interest rate goes up by 2 percentage points, according to the filing, and it is required to put up cash collateral to back letters of credit, which are often tapped for payments to suppliers. The company has $186 million in outstanding letters of credit."
The story points out that the retailer has "racked up losses as sales have plummeted,"
has had trouble keeping its stores in stock because of its lack of funds, and has warned that it may have to file for bankruptcy as it looks at strategic alternatives.
- KC's View:
Talk about a format that is past its expiration date … I cannot imagine why anyone would want the damn thing. (The real estate may have some value, but the brand has outlived any usefulness.)
But I can't possibly say it any better than Willie Nelson:
Turn out the lights, the party's over
They say that all good things must end
Call it a night, the party's over