Moody’s cuts Bed Bath & Beyond

Moody’s Investors Service said it downgraded Bed Bath & Beyond Inc.’s corporate family rating to Ba3 from Ba2, its probability of default rating to Ba3-PD from Ba2-PD and its senior unsecured notes rating to B1 from Ba2. The speculative grade liquidity rating is unchanged at SGL-1.

“The downgrade reflects continued margin pressure and lower EBITDA as a result of the restrictions in place due to the coronavirus pandemic as well as ongoing competitive challenges that will cause debt/EBITDA to be sustained above our 4x downgrade trigger over the next 12 to 18 months as well as concerns regarding the pace of rebound in consumer demand once government support payments end,” said Peggy Holloway, a Moody’s analyst, in a press release.

The two-notch downgrade on the notes reflects the replacement of its prior unsecured credit agreement with an unrated $850 million asset-based credit facility, which moved the notes down in the capital structure,” Moody’s said.

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