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US retailer Bed Bath and Beyond (BBBY) was downgraded to CCC from B- with a negative outlook by S&P on tightening liquidity, poor financials, and debt default worries. S&P sees low prospects of a turnaround in its business due to significant challenges amid worsening macroeconomic conditions and their need to cut spending. The company has a weak liquidity situation, having burned through around $500mn of cash in 1Q 2022. The rating agency expects a liquidity shortfall over the next one year due to weak operating performance and working capital investments. If the company is unable to acquire customers further, then its holiday sales is also expected to fall. BBBY bonds prices are weak, given that bond maturities less than two years away face the risk of a below-par exchange. S&P considers any future exchange of bonds or a tender to be distressed and similar to a default if pursued. In July, BBBY was downgraded to Caa2 from B2 by Moody’s.
Bed Bath’s 3.749% 2024s were down 2.44 points to 38.5 cents on the dollar.