Tesco Takes Step Toward Investment Grade

Bond buyback, cancellation sends a clear signal to rating companies

Tesco Plc’s planned 700 million-pound ($921 million) repurchase and cancellation of outstanding debt is a clear signal that it is on the path back to an investment grade, according to Bloomberg Gadfly’s Marcus Ashworth. That’s a smart move for the U.K.’s biggest retailer, which was dumped into high-yield territory in early 2015. Tesco may not need to raise debt now, but when it does, having an investment-grade rating will help keep borrowing costs low.

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