Bed Bath & Beyond Inc.
) recently made several announcements in connection with its
Firstly, it priced senior unsecured notes, which it plans to offer,
belonging to 3 different series, with the total principal amounting
to $1.5 billion.
The first category includes notes worth $300 million, with an
annual interest rate of 3.749% whose maturity is due in August
2024. The second set of notes worth $300 million bearing an annual
interest rate of 4.915% is due in August 2034. Finally, the last
category of notes bearing an annual charge of 5.165% due in August
2044, are worth $900 million.
The note offering is anticipated to close on Jul 17, 2014, subject
to various market and business conditions. Bed Bath & Beyond
plans to utilize the proceeds from this offering to buy back shares
and for other business purposes.
Going by this strategy, the company proposed to enter into an
accelerated share buyback program worth $1.1 billion, post the
completion of the offering. Looking back, we note that Bed Bath
& Beyond has constantly rewarded its shareholders for about a
Most recently, the company proposed its plan to repurchase shares
worth $2 billion over the next fiscal year. Bed Bath & Beyond
highlighted that it will commence the share repurchases under this
new program following the completion of its existing program, which
had about $861 million worth of shares left to be bought back as of
May 31, 2014. Moreover, the company stated that it expects to
complete this new buyback plan by fiscal 2016.
These authorizations are an indication of the board's confidence in
the company's long-term growth potential, financial outlook and
ability to generate cash flow. Bed Bath & Beyond's strong
balance sheet, along with its cash flow generation ability,
provides the financial flexibility to undertake
shareholder-friendly moves. The company generated cash flow of
$186.9 million and had cash and cash equivalents of $536.6 million
as of the end of first-quarter fiscal 2014.
Share repurchase programs are frequent among companies with a
stable cash position and healthy cash flow. Apart from Bed Bath
CR Bard Inc.
) announced buyback programs in the recent past.
Finally, concurrent with this announcement, the company declared
that it entered into an unsecured senior revolving credit facility
worth $250 million, scheduled to expire in 2019. The company
currently carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
BED BATH&BEYOND (BBBY): Free Stock Analysis
BARD C R INC (BCR): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis
IMAX CORP (IMAX): Free Stock Analysis Report
To read this article on Zacks.com click here.