Bed Bath & Beyond ABL amendment and $1.025 billion equity offering

Davis Polk advised the administrative agent under an asset-based revolving credit agreement among Bed Bath & Beyond Inc., the agent and other parties in connection with an amendment to the ABL credit agreement to, among other things, decrease the aggregate asset-based revolving commitments from $1.13 billion to $565 million, provide for an additional $100 million of first-in last-out (FILO) loans advanced by the company’s existing FILO lenders, waive all outstanding defaults and rescind a previously issued acceleration of the obligations under the ABL credit agreement. 

Concurrent with the execution of the amendment, the company effectuated an underwritten public offering of convertible preferred stock and warrants to purchase convertible preferred stock and common stock. Upon the closing of the equity offering, the company received initial gross cash proceeds of $225 million and, subject to the satisfaction of certain conditions, has certain rights to receive an additional $800 million of gross cash proceeds in future installments. The net cash proceeds of the equity offering and the additional FILO loans will be used for working capital, including to repay the company’s outstanding revolving loans under the ABL credit agreement, subject to reborrowing in accordance with the terms of the credit agreement.

Bed Bath & Beyond Inc. was founded in 1971 and is an iconic American retailer that sells a wide assortment of home and baby-related products. Its brands include Bed Bath & Beyond, Harmon, Face Values and buybuy BABY.

The Davis Polk restructuring team included partners Marshall S. Huebner, Natasha Tsiouris and Adam L. Shpeen and associates Gene Goldmintz, Michael Pera and Jinhe Hu. The finance team included partner Kenneth J. Steinberg, counsel Benjamin Cheng and associate Bernard Tsepelman. Partner Marcel Fausten and associate Michael Jiang provided capital markets advice. All members of the Davis Polk team are based in the New York office.