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Asda Refinances £3.2 Billion Of Debt



Asda announced that it has successfully refinanced more than £3.2bn of its debt – reflecting strong demand from investors and pushing out the majority of its maturities into the next decade.


The refinancing, which completed yesterday, included 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.


Strong investor demand enabled the supermarket 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 £1.1bn equivalent. The maturities of the new senior secured notes and TLB are 2030 and 2031, respectively. As part of the £3.2bn refinancing, Asda used c. £0.3bn of balance sheet cash to reduce gross debt.


Asda also successfully extended the maturity of its revolving credit facility (“RCF”) from August 2025 to October 2028 and was able to upsize this facility from £667m to £748m in connection with the wider refinancing.


The refinancing follows a recent upgrade in Asda’s corporate rating from Moody’s to B1 from B2, while Fitch Ratings raised their outlook on Asda’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.


This came after Asda last week announced a strong financial performance in FY23 – delivering a 24% increase in Adjusted EBITDA after rent to £1.1bn and a 5.4% rise in like-for-like sales.


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.”


The strength of Asda’s FY23 performance and increased cash generation enabled it to reduce leverage from 3.9 times at the start of 2023 to 3.0 times at year end. Asda’s successful refinancing reflects its position as the UK’s third-largest supermarket, serving circa 18 million customers a week across its more than 1,200 stores and foodservice outlets and its number two position in online grocery. Additionally, George at Asda is also the UK’s third-largest fashion retailer by sales volume and the market leader in childrenswear.

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Asda announced that it has successfully refinanced more than £3.2bn of its debt – reflecting strong demand from investors and pushing out the majority of its maturities into the next decade.


The refinancing, which completed yesterday, included 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.


Strong investor demand enabled the supermarket 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 £1.1bn equivalent. The maturities of the new senior secured notes and TLB are 2030 and 2031, respectively. As part of the £3.2bn refinancing, Asda used c. £0.3bn of balance sheet cash to reduce gross debt.


Asda also successfully extended the maturity of its revolving credit facility (“RCF”) from August 2025 to October 2028 and was able to upsize this facility from £667m to £748m in connection with the wider refinancing.


The refinancing follows a recent upgrade in Asda’s corporate rating from Moody’s to B1 from B2, while Fitch Ratings raised their outlook on Asda’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.


This came after Asda last week announced a strong financial performance in FY23 – delivering a 24% increase in Adjusted EBITDA after rent to £1.1bn and a 5.4% rise in like-for-like sales.


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.”


The strength of Asda’s FY23 performance and increased cash generation enabled it to reduce leverage from 3.9 times at the start of 2023 to 3.0 times at year end. Asda’s successful refinancing reflects its position as the UK’s third-largest supermarket, serving circa 18 million customers a week across its more than 1,200 stores and foodservice outlets and its number two position in online grocery. Additionally, George at Asda is also the UK’s third-largest fashion retailer by sales volume and the market leader in childrenswear.

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