Asda has refinanced more than £3.2bn of debt in a deal that pushes the grocer’s debt burdens into the next decade.
The supermarket chain said the deal has deferred the majority of its maturities past 2030 and included the biggest sterling high-yield bond this year.
It noted that it was also the second-largest sterling bond in the European leveraged finance market – only behind its original £2.25bn sterling bond tranches in 2021.
Asda credited “strong investor demand” to help it raise £1.75bn of senior secured notes and upsize by more than £200m on a £900m Equivalent EUR Term Loan B (TLB) bringing the final size to £1.1bn equivalent.
Subscribe to Grocery Gazette for free
Sign up here to get the latest grocery and food news each morning
The notes and loan do not need to be repaid until 2030 and 2031.
As part of the £3.2bn refinancing, Asda used £300m of balance sheet cash to reduce gross debt.
The supermarket also successfully extended the maturity of its revolving credit facility from August 2025 to October 2028 and was able to upsize this facility from £667m to £748m in connection with the wider refinancing.
Asda chief financial officer 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.”
