UK Grocer Asda Seeks to Tackle Debt Wall With New Loan, Bond

(Bloomberg) -- Asda Group Ltd. is planning a bond and loan issuance to help refinance the debt pile that supported its acquisition by gas-station entrepreneurs Mohsin and Zuber Issa, according to people familiar with the matter.

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Britain’s third-largest supermarket chain is looking to raise £1.75 billion ($2.16 billion) through the bond sale, said the people, who asked not to be identified because they’re not authorized to speak publicly about the plans. Separately, it is also marketing a €1.05 billion ($1.1 billion) term loan, according to an announcement seen by Bloomberg.

A spokesman for Asda declined to comment.

Asda is looking to refinance debt after the two Issa brothers teamed up with private equity firm TDR Capital LLP in 2020 to purchase a majority stake from Walmart Inc. in a high-profile deal that valued the storied group at £6.8 billion. A sharp increase in rates has since increased scrutiny of such leveraged acquisitions.

Last year, Asda said it would buy EG Group’s UK and Ireland gas-station business — another part of the Issa brothers’ empire. In a separate development, TDR is closing in on a deal to buy Zuber Issa’s stake in Asda, Bloomberg reported last week.

Monday’s announcement also stated that proceeds from the euro term loan, £1.75 billion of senior secured debt and cash from its balance sheet will be used to refinance a “majority of existing 2026 maturities”.

The company’s outstanding £2.25 billion February 2026 bonds rose further to a cash price of 96.8 pence on the pound on Tuesday morning, its highest level since October 2021, according to pricing compiled by Bloomberg.

Read more: Asda Buys EG Gas Stations in UK, Building Convenience Empire

Asda will hold an investor call on Tuesday, April 23, to discuss the term loan and a deal could come as early as next week.

(Adds outstanding bond price and chart, further detail on refinancing plans)

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