British supermarket Asda has refinanced over £3.2 billion (€3.7 billion) of debt, pushing out the majority of its maturities into the next decade, it said in a statement.
Asda, the UK's third largest grocer, is owned by brothers Zuber and Mohsin Issa and private equity firm TDR Capital.
The supermarket has been burdened by high debt levels since the Issas and TDR bought the business from Walmart in a £6.8 billion (€8 billion) deal in 2020 which left the US giant retaining a 10% stake. Asda's interest costs in 2023 were £225 million (€263.1 million).
'Strong Demand From Investors'
"We saw strong demand from investors after taking a thoughtful and prudent approach to refinancing our near-term debt well ahead of maturities – to further strengthen our balance sheet," Asda finance chief Michael Gleeson said, noting the refinancing followed rating agency Moody's recent upgrade of its corporate rating.
Moody’s upgraded Asda’s corporate rating to B1 from B2, while Fitch Ratings raised their outlook on the company's Long-Term IDR to positive from stable and affirmed the IDR rating at B+ and S&P Global Ratings assigned a B+ long-term issuer rating with a stable outlook, the company noted.
Last month, Asda reported a 24% jump in 2023 earnings to over £1 billion (€1.2 billion).
However, monthly industry data has shown Asda continuing to lose market share to rivals this year including to market leader Tesco and No. 2 Sainsbury's.
Elsewhere, market researcher NIQ said Asda's sales were down 0.9% over the 12 weeks to April 20 year on year, with its market share down 70 basis points on the year.
News by Reuters, additional reporting by ESM.
