Bed Bath & Beyond plummets on failed debt exchange, bankruptcy warning; Coinbase lower

By Abigail W. Adams

Portland, Me., Jan. 5 – One name dominated the tape in the distressed debt space on Thursday with one of the predictions for 2023 coming to pass in the first trading sessions of the year.

Bed Bath & Beyond Inc.’s deeply distressed notes plummeted to pennies on the dollar after the company announced it was considering bankruptcy following the failure of its distressed debt exchange.

Coinbase Global, Inc.’s junk bonds (Ba2/BB) were lower as bankruptcy concerns continued to swirl around the crypto space.

While default concerns drove certain names lower, the distressed debt space continued to log gains.

The S&P U.S. High Yield Corporate Distressed Bond index closed Thursday up 0.66%, marking its third consecutive day of gains.

Bed Bath & Beyond gone?

Bed Bath & Beyond’s deeply distressed notes plummeted to pennies on the dollar after the retailer announced that its attempt at a distressed debt exchange had failed and it was considering filing for bankruptcy protection.

Bed Bath & Beyond’s 3.749% senior notes due 2024 (C/D) were among the most actively traded issues in junkbondland with the notes falling more than 10 points to close Thursday wrapped around 12 with a yield of 211%, according to a market source.

There was $21 million in reported volume.

The 4.195% senior notes due 2034 and 5.165% senior notes due 2044 both fell 4 points to close Thursday at 5.75 and 6, respectively.

Bed Bath & Beyond has been a closely watched name in the distressed retail space with market expectations for a default high.

The company has yet to default on the bonds and was pursuing a distressed debt exchange to manage its debt burden.

However, Bed Bath & Beyond announced the exchange and consent solicitation had failed after two deadline extensions and it was considering filing for bankruptcy protection, Prospect News reported.

The retail space will be closely watched in the coming year with many expecting the sector to crumble in the highly anticipated recession.

However, some names in the retail space have outperformed on strong earnings and positive consumer sentiment.

Coinbase lower

Coinbase’s junk bonds were lower as the bankruptcy headlines continued to swirl around the crypto space.

Coinbase’s 3 3/8% notes due 2028 (Ba2/BB) fell more than 1 point to close Thursday at 54 3/8, according to a market source.

The yield climbed to 15¾%.

However, the crypto-exchange’s 3 5/8% senior notes due 2031 were relatively unchanged with the notes continuing to trade at 50 with a yield of 13½%.

While a BB credit, the notes fell into distressed territory amid plummeting Bitcoin prices and some high-profile crypto-exchange bankruptcies in the first half of 2022.

The implosion of crypto-exchange FTX in November sent Coinbase’s junk bonds into the 50s as investors braced for more bankruptcies in the space.

News broke on Thursday that crypto lender Genesis Global Trading Inc. was considering filing for bankruptcy protection.

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