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JPMorgan Chase Agents $850MM Asset-based Revolving Credit Facility for Bed, Bath & Beyond

June 22, 2020, 09:15 AM
Filed Under: Retail

Bed Bath & Beyond Inc. announced it has further strengthened its liquidity position by executing an $850 million three-year secured asset-based revolving credit facility (ABL Facility) with a syndicate of banks.  The ABL Facility expires in June 2023 and replaces the Company's existing unsecured revolving credit facility allowing for borrowings up to $250 million.

JPMorgan Chase Bank, N.A., served as administrative agent and collateral agent to the syndicated financing according to regulatory documents.

Gustavo Arnal, Chief Financial Officer & Treasurer stated, "An important focus as we transform our Company is to ensure liquidity and to improve cash flow generation.  The Company went into the COVID-19 pandemic with a healthy cash position. This new ABL facility, in combination with actions being taken to drive cash flow, are enabling a more robust balance sheet."

Enhanced Liquidity Position

The unparalleled challenge of the COVID-19 pandemic has significantly impacted the Company's operations during its fiscal 2020 first quarter, which commenced on March 1, 2020.  To reduce the anticipated impact and business disruption, including loss of sales due to store closures and margin pressure from the significant channel shift to digital, the Company has proactively taken steps to strengthen its financial position and liquidity.  These actions have involved, among other things, tightly controlling expenses, working capital, and capital expenditures; drawing down the remaining available funds from its existing unsecured revolving credit facility; furloughing the majority of store associates and a portion of corporate associates; extending payment terms for goods and services and rent; suspending plans for share repurchases, dividend payments and debt reduction; and postponing $150 million of planned capital expenditures. 

Store Re-Opening Update

Bed Bath & Beyond's COVID-19 response has also included aggressive and thoughtful steps to safeguard its people and communities while continuing to serve customers.  During this time, the Company has rapidly evolved to meet the changing needs of its customers by leveraging its omni-channel network and accelerating the introduction of Buy-Online-Pickup-In Store (BOPIS) and contactless Curbside Pickup services.  These new services helped support the significant increase in demand across the Company's digital channels while the majority of stores remained closed. 

In late May 2020, the Company began taking measured steps to re-open stores to the public, including the launch of a Store Safety Plan to help ensure customers can shop in its stores confidently.  In recent weeks, the pace of store re-openings has accelerated in line with changing local and state regulations, market data and the wider retail landscape.  The Company expects approximately 95% of its total store fleet to re-open by the end of this week and nearly all stores to re-open by July 2020, subject to state and local regulations.  Additionally, BOPIS and contactless Curbside Pickup services will be expanded to cover the vast majority of stores.

Mark Tritton, President & CEO said, "We have been delighted to welcome our customers back as we re-opened hundreds of stores in the last few weeks.  At the same time, we are pleased with the response from our loyal customers to our new BOPIS and contactless Curbside Pickup shopping experience.  These are important, targeted investments that strengthen our service offering and competitive position for the long term.

"While the impact of the COVID-19 situation has been felt across our business, we have taken measured, purposeful steps to maintain our financial flexibility.  We ended our fiscal 2020 first quarter with approximately $1.2 billion in cash and investments, and we now have access to additional liquidity through our new ABL facility."

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