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KCP Special Report: Bed Bath & Beyond: Less Bricks, More Clicks – CMBS Exposure Examined

January 11, 2019

NEW YORK--(BUSINESS WIRE)--Jan 11, 2019--Earlier this week, Bed Bath & Beyond Inc. (BBBY) reported financial results for Q3 2018. Brick-and-mortar sales declined in the mid-single-digit percentage range, while sales from customer-facing digital channels reportedly experienced strong growth. BBBY has shifted its focus in recent years towards e-commerce and invested heavily in technology-related initiatives. Simultaneous with its investments in these areas, the company is actively working to optimize its portfolio of physical stores. As part of its forward-looking strategy, BBBY has retained a third-party consultant to evaluate the impact of existing leases on margins and effectuate a more proactive and aggressive approach in negotiating with its landlords.

KBRA Credit Profile (KCP) examined its roughly $595 billion coverage universe of over 925 transactions to identify CMBS exposure to BBBY’s store portfolio and identified 271 loans secured by 293 properties, $12.30 billion by allocated loan amount (ALA), with exposure to BBBY as either a collateral or non-collateral/shadow tenant. There are 245 transactions with exposure to BBBY and 95.7% of the securitized debt resides in post-crisis transactions.

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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190111005411/en/

CONTACT: Analytical Contacts:John Carandang, Analyst

(215) 882-5927

jcarandang@kbra.comMaurice Etienne, Analyst

(215) 882-5856

metienne@kbra.comPatrick Czupryna, Director

(215) 882-5854

pczupryna@kbra.comMike Brotschol, Senior Director

(215) 882-5853

mbrotschol@kbra.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE INSURANCE

SOURCE: Kroll Bond Rating Agency

Copyright Business Wire 2019.

PUB: 01/11/2019 01:18 PM/DISC: 01/11/2019 01:18 PM

http://www.businesswire.com/news/home/20190111005411/en

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