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Asda has announced that it has refinanced £3.2bn of debt pushing out the majority of its maturities into the next decade.
The refinancing included the biggest Sterling high-yield bond this year and the second-largest sterling bond in the European leveraged finance market.
Asda also successfully extended the maturity of its revolving credit facility (“RCF”) from August 2025 to October 2028.
It was able to upsize this facility from £667m to £748m in connection with the wider refinancing.
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 around £0.3bn of balance sheet cash to reduce gross debt.
This comes after Asda 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, CFO, 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.”
He added: “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.”
