Tesco Bondholders Seeing Cut to Junk Join Shopper Exodus
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Tesco Plc’s battle to retain its investment-grade status is driving up borrowing costs for a company saddled with more than 16 billion pounds ($26 billion) of debt.
Tesco bonds plunged and the cost of insuring them against default soared last week after Moody’s Investors Service cut the biggest U.K. grocer to one level above junk and warned that a further downgrade could follow unless its financial position improves. Cuts were also announced by Fitch Ratings and Standard & Poor’s.