Asda completes £3.2bn debt refinancing
Asda has successfully completed the refinancing of over £3.2bn worth of debt, pushing the majority of its maturities into the 2030s.
The supermarket retailer said the successful refinancing – which was completed on Thursday – reflects strong demand from investors.
The refinancing included the biggest Sterling high-yield bond this year and the second-largest sterling bond in the European leveraged finance market – only behind the retailer’s original £2.25bn Sterling bond tranche in 2021.
Asda said strong investor demand enabled it to 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 the equivalent of £1.1bn.
The maturity dates of the new senior secured notes and TLB are in 2030 and 2031, respectively.
As part of the £3.2bn refinancing, Asda used approximately £300m of balance sheet cash to reduce gross debt.
Asda also completed a successful extension to 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.
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.”
Last week, Asda recorded an adjusted EBITDA after rent of over £1bn in 2023, driven by its acquisitions of former EG Group and Co-op stores.