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.
Bed Bath & Beyond’s fell more than 5% to $3.74 on Monday following the announcement of its stock dilution. Its decline had been steeper earlier in the day. The stock, which is down 74% so far this year, hit a new 52-week low Monday.
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.
In addition to its mountain of debt, the troubled retailer has recently been grappling with a leadership shakeup, strained relationships with suppliers and the aftermath of a meme-stock frenzy fueled by activist investor Ryan Cohen, who later sold his shares.
Bed Bath & Beyond has more than $1 billion in unsecured notes with maturity dates spread across 2024, 2034 and 2044.
On Monday, Bed Bath & Beyond said it would issue 11.7 million in stock to pay off $123 million – about $69 million of the 2024 notes, $5.8 million of the 2034 notes and $48.2 million of the 2044 notes. The unsecured notes have all been trading below par.
In August, Bed Bath & Beyond announced new debt funding that was expected to give it some breath room, especially with suppliers.