Asda refinances over £3.2bn of debt

The retailer said that this reflects the “strong demand”​ from investors, with the refinancing including the biggest Sterling high-yield bond this year and the second-largest sterling bond in the European leveraged finance market – only behind Asda’s original £2.25bn Sterling bond tranche in 2021.

Asda raised £1.75bn of senior secured notes and upsized a £900m Equivalent EUR Term Loan B by £200m, while it used close to £300m to reduce its gross debt.

Meanwhile, the supermarket extended the end date of its revolving credit facility from August 2025 to October 2028, as well as upsizing it from £667m to £748m.

The refinancing comes on the back of Asda having its Moody’s corporate rating upgraded from B2 to B1.

In its most recent results, Asda revealed it has increased underlying profits by 24% to £1.1bn during 2023 after boosting like-for-like sales by 5.4%.​​

Commenting on the refinancing, Asda CEO Michael Gleeson said: “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.​

“The positive reaction followed Asda’s strong FY23 results – and Moody’s upgrade of its corporate rating to B1 from B2 last week citing a material reduction in leverage and growth in underlying free cashflow.​

“The refinancing also reflects the wider strength of Asda as a diversified retail group with a strong grocery business at its core supported by a fantastic non-food offering in George and following recent investments, a major presence in the high-growth convenience and food-service markets.”​

According to data from Kantar published on 14 April 2024, Asda holds a 13.4% share of the UK grocery market, making it the third largest retailer behind Tesco and Sainsbury’s.

In other news, UK beer manufacturer Greene King has announced plans to invest £40m into the development of a “state-of-the-art” brewery in Bury St Edmunds, Suffolk.​​