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Asda refinances £3.2 billion of debt

Asda has announced that it has refinanced more than £3.2 billion of its debt. Completed on 2 May, the deal has pushed the majority of the… View Article

FOOD AND DRINK NEWS UK

Asda refinances £3.2 billion of debt

Asda has announced that it has refinanced more than £3.2 billion of its debt.

Completed on 2 May, the deal has pushed the majority of the supermarket’s maturities into the next decade and has included the biggest sterling high-yield bond of this year.

Asda said strong investor demand enabled it to raise £1.75 billion of senior secured notes and to refinance its £900 million Term Loan B. The new senior secured notes and term loan are due to mature in 2030 and 2031, respectively. As part of the refinancing, Asda also used around £0.3 billion of balance sheet cash to reduce gross debt.

In a further move, the supermarket has extended the maturity of its revolving credit facility from August 2025 to October 2028 while upsizing it from £667 million to £748 million.

The news follows last month’s announcement by Asda that its full year adjusted EBITDA after rent had risen by 24% to £1.078 billion and that like-for-like sales had increased by 5.4%.  

Michael Gleeson, Asda’s chief financial officer, 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.”

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