Bed Bath & Beyond Sells $1.5 Billion of Bonds for Buyback

Bed Bath & Beyond Inc. (BBBY), the owner of Buybuy Baby in addition to its flagship chain, sold $1.5 billion of bonds in a three-part deal to fund share repurchases.

The offering included $900 million of 5.165 percent notes due 2044 that yield 180 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. It also consisted of $300 million each of 4.915 percent bonds due 2034 and 3.749 percent securities due 2024.

Standard & Poor’s increased its corporate grade on the retailer to A- from BBB+. Bed Bath & Beyond is also seeking a $250 million revolving line of credit, S&P analysts led by Helena Song wrote today in a report.

“The upgrade reflects our view that the company’s proposed debt offering and establishment of a credit facility crystallize the company’s financial policy, with a definitive and stable capital structure going forward,” the analysts wrote.

The 20-year bonds were sold to pay 155 basis points, or 1.55 percentage points more than benchmarks, Bloomberg data show. The 10-year securities were priced at a spread of 120 basis points.

Bed Bath & Beyond announced on July 7 that it’s planning to repurchase $2 billion of shares following its existing program, which had about $861 million remaining as of May 31. The company purchased about $6.6 billion of stock from 2004 through the first fiscal quarter of 2014, the Union, New Jersey-based company said in a statement at the time.

To contact the reporter on this story: Adam Janofsky in New York at

To contact the editors responsible for this story: Shannon D. Harrington at Richard Bravo

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